Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):

(4)

Proposed
maximum aggregate value of transaction:

(5)

Total
fee paid:

o

Fee
paid previously with preliminary materials.

o

Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1)

Amount
Previously Paid:

(2)

Form,
Schedule or Registration Statement No.:

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Filing
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Filed:

125
HIGHWAY 515 EAST

BLAIRSVILLE,
GEORGIA 30514-0398

________________________________________________________

NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS

________________________________________________________

To
be Held on May 26, 2010

The
Annual Meeting of Shareholders of United Community Banks, Inc. will be held on
May 26, 2010 at 2:00 p.m. at the Charles R. Clegg Fine Arts Building at
Young Harris College, Young Harris, Georgia:

1.

To
elect eight directors to constitute the Board of Directors to serve until
the next annual meeting and until their successors are elected and
qualified.

2.

To
approve an amendment to the Amended and Restated Articles of Incorporation
of United to increase the number of shares of common stock available for
issuance.

3.

To
approve an amendment to the Amended and Restated Articles of Incorporation
to allow for amendments to the Bylaws by the Board of
Directors.

4.

To
approve the sale of convertible preferred stock and grant of a warrant to
purchase our common stock equivalent junior preferred stock to Fletcher
International, Ltd. which, if converted and exercised, could result in an
issuance of common stock in excess of 20% of our outstanding shares of
common stock.

5.

To
approve an advisory resolution supporting the compensation plan for
executive officers.

6.

To
ratify the appointment of Porter Keadle Moore, LLP as independent
registered public accountant for 2010.

7.

To
consider and act upon any other matters that may properly come before the
meeting and any adjournment
thereof.

Only
shareholders of record at the close of business on March 27, 2010 will be
entitled to notice of, and to vote at, the meeting. A proxy statement
and a proxy solicited by the Board of Directors are enclosed.

To ensure
that your vote is recorded promptly, please vote as soon as
possible. Most shareholders of record have three options for
submitting their vote before the meeting. You may vote (1) by
telephone if you reside in the United States, Canada or the U.S. territories,
(2) via the Internet (see the instructions on the proxy card), or (3) by
completing, signing and mailing the proxy card in the enclosed postage–paid
envelope. If you have Internet access, we encourage you to record
your vote on the Internet. It is convenient and it saves significant
postage and processing costs. If you attend the meeting you may, if
you wish, withdraw your proxy and vote in person.

If your
shares are held in “street name”, that is held for your account by a broker or
other nominee, you will receive instructions from the holder of record that you
must follow for your shares to be voted.

BY
ORDER OF THE BOARD OF DIRECTORS,

Jimmy
C. Tallent,

President
and Chief Executive Officer

April 15,
2010

WHETHER
OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE VOTE BY
TELEPHONE, INTERNET, OR COMPLETE AND RETURN THE ENCLOSED PROXY PROMPTLY SO
THAT YOUR VOTE MAY BE RECORDED.

This
proxy statement is furnished in connection with the solicitation of proxies by
the Board of Directors of United Community Banks, Inc. for use at the 2010
Annual Meeting of Shareholders to be held on Wednesday, May 26, 2010 at
2:00 p.m., at the Charles R. Clegg Fine Arts Building at Young Harris College,
Young Harris, Georgia, and at any adjournments or postponements of the Annual
Meeting.

QUESTIONS
AND ANSWERS ABOUT THE ANNUAL MEETING

What
is the purpose of the Annual Meeting?

At the
Annual Meeting, shareholders will act upon the matters set forth in the
accompanying notice of meeting, including the election of eight directors,
amendments to the Amended and Restated Articles of Incorporation of United,
approval of an advisory resolution on executive compensation, the ratification
of the appointment of United’s independent registered public accountant and any
other matters that may properly come before the meeting.

Who
is entitled to vote?

All
shareholders of record of United’s common stock at the close of business on
March 27, 2010, which is referred to as the record date, are entitled to
receive notice of the Annual Meeting and to vote the shares of common stock held
by them on the record date. Each outstanding share of common stock
entitles its holder to cast one vote for each matter to be voted
upon.

How
do I cast my vote?

If you
hold your shares of common stock in your own name as a holder of record and you
have Internet access, United prefers that you vote your shares via the Internet
at illinoisstocktransfer.com. Alternatively, you may vote your shares
by telephone if you reside in the United States, Canada or the U.S. territories,
or by marking, signing, dating and returning the proxy card in the postage-paid
envelope provided to you or you may vote in person at the Annual
Meeting. If your shares of common stock are held in “street name”,
that is held for your account by a broker, bank or other nominee, you will
receive instructions from your nominee which you must follow in order to have
your shares voted.

Proxies
that are executed and returned or submitted through the Internet, but do not
contain any specific instructions on any proposal, will be voted “FOR” the
proposals specified herein.

1

What
are the quorum and voting requirements?

The
presence, in person or by proxy, of holders of at least a majority of the total
number of outstanding shares of common stock entitled to vote is necessary to
constitute a quorum for the transaction of business at the Annual
Meeting. As of the record date, there were 94,175,857 shares of
common stock outstanding and entitled to vote at the Annual
Meeting.

The
required vote for each item of business at the Annual Meeting is as
follows:

1.

For
the election of directors, those nominees receiving the greatest number of
votes at the Annual Meeting shall be deemed elected, even though the
nominees may not receive a majority of the votes cast. However,
as described in “Corporate Governance – Majority Vote Requirement”, under
certain circumstances, nominees who are elected receiving less than a
majority vote may be asked to resign.

2.

For
the approval of an Amendment to the Amended and Restated Articles of
Incorporation of United (the “
Articles
”)
to increase the number of authorized common shares available for issuance,
the vote of a majority of all shares outstanding.

3.

For
approval of an amendment of the Articles to allow for amendment to the
Bylaws of United (the “
Bylaws
”)
by the Board of Directors, the vote of two-thirds of all outstanding
shares.

4.

For
approval of the sale of convertible preferred stock and grant of a warrant
to purchase common stock equivalent junior preferred stock to Fletcher
International, Ltd. (“
Fletcher
”),
the vote of a majority of the shares voted on the
matter.

5.

For
the approval of the advisory resolution supporting the compensation plan
for the executive officers, the vote of a majority of the shares voted on
the matter.

6.

For
the ratification of the appointment of Porter Keadle Moore, LLP as
independent registered public accountant for 2010, the vote of a majority
of the shares voted on the matter.

7.

For
any other business at the Annual Meeting, the vote of a majority of the
shares voted on the matter, assuming a quorum is present, shall be the act
of the shareholders on that matter, unless the vote of a greater number is
required by law.

How
are votes counted?

Abstentions
and “broker non-votes” will be counted only for purposes of establishing a
quorum, but will not otherwise affect the vote. “Broker non-votes”
are proxies received from brokers or other nominees holding shares on behalf of
their clients (in “street name”) who have not been given specific voting
instructions from their clients with respect to non-routine
matters. Typically, the election of directors and the ratification of
independent auditors are considered routine matters by brokers and other
nominees allowing them to have discretionary voting power to vote shares they
hold on behalf of their clients for the election of directors and the
ratification of an independent auditor.

Because
directors are elected by a plurality of the votes cast, except as described in
“Corporate Governance – Majority Vote Requirement”, the director nominees who
get the most votes will be elected even if such votes do not constitute a
majority. Directors cannot be voted “against” and votes to “withhold
authority” to vote for a certain nominee will have no effect if the nominee
receives a plurality of the votes cast. For the approval of the
advisory vote on executive compensation, ratification of the appointment of
Porter Keadle Moore, LLP as independent registered public accountant for 2010,
approval of an increase in the number of authorized common shares available for
issuance and any other proposals that come before the meeting, you may vote
“for” or “against” the proposal.

2

If you
hold your shares of common stock in your own name as a holder of record, and you
fail to vote your shares, either in person or by proxy, the votes represented by
your shares will be excluded entirely from the vote.

Will
other matters be voted on at the Annual Meeting?

We are
not aware of any other matters to be presented at the Annual Meeting other than
those described in this proxy statement. If any other matters not
described in the proxy statement are properly presented at the meeting, proxies
will be voted in accordance with the best judgment of the proxy
holders.

Can
I revoke my proxy instructions?

If you
are a record holder, you may revoke your proxy by:

●

filing
a written revocation with the Secretary of United at the following
address:

P.O.
Box 398, Blairsville, Georgia 30514-0398;

●

filing
a duly executed proxy bearing a later date; or

●

appearing
in person and electing to vote by ballot at the Annual
Meeting.

Any
shareholder of record as of the record date attending the Annual Meeting may
vote in person by ballot whether or not a proxy has been previously given, but
the presence (without further action) of a shareholder at the Annual Meeting
will not constitute revocation of a previously given proxy.

Any
shareholder holding shares in “street name” by a broker or other nominee must
contact the broker or nominee to obtain instructions for revoking the proxy
instructions.

What
other information should I review before voting?

The 2009
annual report to shareholders and the annual report on Form 10-K filed with the
Securities and Exchange Commission, including financial statements for the year
ended December 31, 2009, are enclosed with this proxy
statement. The annual report is not part of the proxy solicitation
material. An additional copy of the annual report on Form 10-K may be
obtained without charge by:

●

accessing
United’s website at ucbi.com;

●

writing
to the Secretary of United at the following address:

P.O.
Box 398, Blairsville, Georgia 30514-0398; or

●

accessing
the EDGAR database at the SEC’s website at
sec.gov.

You may
also obtain copies of United’s Form 10-K from the SEC at prescribed rates by
writing to the Public Reference Section of the SEC, Room 1580, F. Street, N.E.,
Washington, D.C. 20549. Please call the SEC at (800) SEC-0330 for
further information about obtaining information from the SEC.

3

NOTICE
REGARDING THE AVAILABILITY OF PROXY MATERIALS

We have
posted materials related to the 2010 annual meeting on the
Internet. The following materials are available on the Internet at
ucbi.com/proxy:

●

This
proxy statement for the 2010 annual meeting,

●

United’s
2009 annual report to shareholders, and

●

United’s
annual report on Form 10-K filed with the Securities and Exchange
Commission.

You are
also invited to attend the 2010 annual meeting in person. To
pre-register to attend the annual meeting you may:

●

follow
the instructions on the enclosed proxy card,

●

email
Investor_Relations@ucbi.com and indicate the name of the person(s)
attending, or

●

you
may call (866) 270-5900.

For
directions to the annual meeting, visit yhc.edu, or call (866) 270-5900 and an
Investor Relations professional can assist you.

4

PROPOSAL
1 - ELECTION OF DIRECTORS

Introduction

The
Bylaws of United provide that the number of directors may range from eight to
14. The Board of Directors of United has set the number of directors
at eight. The number of directors may be increased or decreased from
time to time by the Board of Directors by resolution, but no decrease shall have
the effect of shortening the term of an incumbent director. The terms
of office for directors continue until the next Annual Meeting and until their
successors are elected and qualified.

Information
Regarding Nominees for Director

The
following information has been furnished by the respective nominees for director
as of March 1, 2010. All of the nominees for director are existing
directors that have been nominated by the Board of Directors for
re-election.

Jimmy
C. Tallent

Director
since 1988

Age
57

President
and Chief Executive Officer

Executive
Committee

Mr.
Tallent has served as President and Chief Executive Officer of United Community
Banks, Inc. from the time it was formed in 1988. He served as United
Community Bank’s President and Chief Executive Officer since 1984 and currently
serves as its Chairman. Under Mr. Tallent’s leadership, United
Community Bank has grown from a small, one-branch banking operation in the rural
community of Blairsville, Georgia to the third largest bank holding company
headquartered in Georgia with $8 billion in assets and 107 banking offices
covering three states in the Southeast. Mr. Tallent is a member of
the Georgia Power board and serves as a Trustee of Young Harris College in Young
Harris, Georgia. He is a former member of the State Board for the
Georgia Department of Technical and Adult Education, the Global Health Action
Board of Directors and the Georgia Chamber of Commerce Board of
Directors. Mr. Tallent has also served as the Georgia State YMCA
Finance Chairman.

Mr.
Tallent’s many professional accomplishments include the Georgia Economic
Developers Association’s Spirit of Georgia Award that was presented to Mr.
Tallent in 1999. This award is presented annually to a Georgia
business executive who has demonstrated superior ability, originality, potential
impact, and courage in business development. For five consecutive
years Georgia Trend magazine has recognized Mr. Tallent as one of the “100 Most
Influential Georgians.” In 2007, Mr. Tallent was honored with the
Ernst & Young Entrepreneur of the Year Award for Financial Services in the
Alabama / Georgia / Tennessee region. Mr. Tallent attended Young
Harris College and Piedmont College and is a graduate of the Georgia Banking
School in Athens, Georgia.

For the
following reasons, the board of directors of United Community Banks, Inc. has
concluded that Mr. Tallent should serve as a director of the
company. As president and chief executive officer, Mr. Tallent is the
only officer to serve on our board, consistent with our past
practice. With more than 26 years of experience, Mr. Tallent has a
deep knowledge and understanding of United, its “community banks” and its lines
of business. Mr. Tallent has demonstrated leadership abilities and has the
integrity, values and good judgment that make him well-suited to serve on the
Board of Directors.

5

Robert
L. Head, Jr.

Director
since 1988

Age
70

Chairman
of the Board

Executive
Committee Chairman

Mr. Head
has served on the Board of Directors of United Community Banks, Inc. since its
establishment in 1988 and was elected Chairman in 1989. Mr. Head has
served on the board of United Community Bank since 1973. In addition
to his service with United, Mr. Head serves on the Board of Trustees and
Executive Committee of Young Harris College. He served on the Georgia
State Board of Industry, Trade and Tourism from 1994 to 2000.

Mr. Head
has been president of Head-Westgate Corporation, a commercial construction and
retail center management company, since 1987. Prior to that, he was
president of Robert L. Head Building Supply from 1970 to 1986. Mr.
Head began his professional career in 1961 as a production accountant for the
Coca-Cola Company, followed by military service in the U.S. Army Reserves and
Georgia Air National Guard. He holds an associates degree from Young
Harris College, as well as a graduate degree from Georgia State
University.

United
values business leadership and the experience our directors gain through such
leadership. Mr. Head is recognized both locally and statewide for his
knowledge of management, industry and construction – all valuable assets to the
Board of Directors because a significant portion of United’s business is in the
areas of construction and small business banking. Mr. Head’s
extensive experience and leadership in these areas provide a unique perspective
to the Board. The Board also believes the Mr. Head’s values and
commitment to excellence make him well-suited to serve as Chairman of the
Board.

W.
C. Nelson, Jr.

Director
since 1988

Age
66

Vice
Chairman of the Board

Executive
Committee

Audit
Committee Chairman

Nominating/Corporate
Governance Committee

Compensation
Committee

Mr.
Nelson has served on the United Community Banks, Inc. Board of Directors since
its formation in 1988, and was elected Vice Chairman in 1992. He has
served on the Board of United Community Bank since 1974. Mr. Nelson
is the co-owner and operator of Nelson Tractor Co. in Blairsville, Georgia, a
dealer of farm and light industrial equipment established by the Nelson family
in 1949. In this capacity he has served on the Ford Tractor National
Dealer Council, as well as the Kubota National Dealer Advisory Board
representing southeast U.S. dealers. Mr. Nelson attended Young Harris
College and The Georgia Institute of Technology. He has been a member
of the Union County (Georgia) Development Board for more than 30 years and has
served as chairman for 15 years. Mr. Nelson is a current member of
the Tennessee Valley Authority (TVA) Regional Resource Stewardship Council
representing the state of Georgia, and is currently on the Young Harris Board of
Associates and the Blairsville Downtown Development Authority.

In
addition to owning and operating a thriving local business, Mr. Nelson’s
managerial and leadership expertise is recognized by professional and
governmental entities nationwide. In addition to his keen leadership,
Mr. Nelson brings to the Board of Directors a broad community perspective due to
his lengthy involvement in, and leadership of, varied local and regional
municipal organizations – a valued perspective because of United’s strong
commitment to the communities it serves. The Board believes that Mr.
Nelson’s dedication to community development, as well as his decades of business
leadership and board experience makes him well-suited for the Board of
Directors.

6

Robert
H. Blalock

Director
since 2000

Age
62

Audit
Committee

Nominating/Corporate
Governance Committee

Compensation
Committee

Mr.
Blalock has been Chief Executive Officer of Blalock Insurance Agency, Inc. in
Clayton, Georgia, since 1974. He served as an organizing director of
First Clayton Bank and Trust when the bank was formed in 1988. He was
a director and served on the compensation and audit committees for First Clayton
Bank and Trust, which was acquired by United in 1997, and was past chairman of
the board. Mr. Blalock remains on the community bank board of United
Community Bank – Clayton (the former First Clayton Bank and Trust), and joined
the United Community Banks, Inc. Board in 2000. Mr. Blalock is a
graduate of University of Georgia and served as an Infantry Officer in the U.S.
Army. He served a tour of duty in Vietnam with the 101 Airborne
Division. He was a member of the Rotary Club of Clayton Board of
Directors from 1974 to 1991 and served as the club’s vice
president.

Extensive
knowledge and business experience, as well as involvement in our banking
communities provide critical insight to our Board of Directors. Mr.
Blalock’s experience and leadership of a small business in the Clayton community
provides a much-needed perspective into a business community that is
representative of several others in United’s service area. As a past
director of First Clayton Bank and Trust – which has been part of United since
1997 – Mr. Blalock brings not only a rich history of banking leadership, but a
perspective of the bank acquisition process. The Board believes that
Mr. Blalock’s 36 years of business experience and 20 years of bank board
experience make him well-suited to serve on the Board of Directors.

Cathy
Cox

Director
since 2008

Age
51

Audit
Committee

Nominating/Corporate
Governance Committee

Compensation
Committee Chairman

Ms. Cox
has served on the United Community Banks, Inc. Board of Directors and the board
of United Community Bank since 2008. Ms. Cox has been President of
Young Harris College, a private, liberal arts college in North Georgia, since
2007. In her short time at the college, she has moved the college
from two-year to four-year status, nearly doubling the size of the
institution. She also has started design and construction on an $80
million expansion project. Prior to joining the college, Ms. Cox
served as the Georgia Secretary of State. Twice elected, in this role
she served as the Commissioner of Securities, overseeing the regulation of the
securities industry within the state. She also participated in one of
the largest ever national settlements against national investment banks for
state and federal law violations.

Ms. Cox
was twice elected to the Georgia House of Representatives where she served on
the House Judiciary Committee; Game, Fish and Parks Committee; State
Institutions and Properties Committee, Georgia Code Revision Commission and
various House study committees. Prior to her public service, Ms. Cox
worked as an attorney, first as an associate with Hansell & Post in Atlanta,
Georgia, and then as a partner with Lambert, Floyd & Conger in Bainbridge,
Georgia. She started her professional career as a newspaper
reporter. Ms. Cox holds an A.S. degree from Abraham Baldwin
Agricultural College, an A.B.J. degree from University of Georgia, and a J.D.
from Mercer University School of Law. She was Editor-in-Chief of the
Mercer Law Review.

Ms. Cox
provides a very unique combination of legal, governmental and educational
experience to the Board of Directors. In her legal career, Ms. Cox
served as legal counsel for community banks in Georgia. This,
combined with her extensive government service, brings a depth of legal and
governmental expertise to the Board. Her leadership of a college
undergoing tremendous growth demonstrates Ms. Cox’s vision and strong management
skills, and offers the perspective of a key educational institution to the
Board. For these reasons, the Board believes Ms. Cox is well-suited
to serve on the Board of Directors.

7

Hoyt
O. Holloway

Director
since 1993

Age
70

Nominating/Corporate
Governance Committee

Compensation
Committee

Mr.
Holloway has been owner of H & H Farms, a poultry operation, since
1989. He also is co-owner and manager of Holloway Properties LLC, a
real estate development and commercial property rental company. Prior
to this he owned and operated Holloway Service Center, a tire and auto service
business, for 10 years. During his career Mr. Holloway also has
co-owned and managed an automobile dealership, oil distributorship and service
station. Mr. Holloway currently serves as chairman of the community
bank board of United Community Bank – Fannin County (Georgia) and has served on
the Fannin County Hospital Authority Board and the Fannin County Health
Department Advisory Board. He was one of seven organizers of Peoples
Bank of Fannin County in 1986 where he served as a member of the bank’s board
since 1986 and audit committee for three years and has served on the Board of
Directors of United Community Banks, Inc. since United acquired Peoples Bank of
Fannin County in 1993.

Mr.
Holloway brings to the Board of Directors decades of business management
experience and entrepreneurship. As small business and real estate
development experience are important aspects of United’s business, Mr.
Holloway’s accomplishments and leadership in these areas provide invaluable
perspective for the Board. The Board believes that this experience,
his history with organizing Peoples Bank of Fannin County, as well as his
integrity and commitment to community development make him well-suited to serve
on the Board of Directors.

John
D. Stephens

Director
since 2007

Age
69

Nominating/Corporate
Governance Committee

Compensation
Committee

Mr.
Stephens is owner, general and managing partner of Stephens MDS, LP, in College
Park, Georgia, which oversees the operation of a construction and demolition
landfill. He also is owner and president of Stephens Rock and Dirt,
Inc., which oversees all aspects of the operation of a facility for the
recycling and processing of soil, rock, concrete, concrete blocks and cured
asphalt pavement. He is general and managing partner of three real
estate, development and property management companies. From 1966 to
2005, Mr. Stephens was president of John D. Stephens, Inc., an underground
utility, heavy construction and pipeline construction company. Mr.
Stephens also serves on the Executive Committee of the Gwinnett Chamber of
Commerce and Board of Trustees of Georgia Gwinnett College. He is
past president of the Georgia Utility Contractors Association and has served on
the Georgia Board of Industry and Trade Commission. Mr. Stephens
holds an associates degree and Bachelor of
S
cience degree in
Mechanical Technology from Southern Polytechnic State University.

Mr.
Stephens has extensive experience in bank board participation and bank
leadership roles, beginning in the 1970s as a board member of Gwinnett County
Bank. Through various mergers and acquisitions of Gwinnett County
Bank between that time and 2000, Mr. Stephens served on the boards of Button
Gwinnett Savings Bank, The Bank of Gwinnett, and Premier Bank. In
1999, he oversaw the sale of Premier Bank to BB&T. A year later,
he helped to organize and found First Bank of Gwinnett, where he served as
chairman of the board. First Bank of Gwinnett became First Bank of
the South, which was acquired by United in 2007.

8

Mr.
Stephens’ involvement on the board of First Bank of South and its parent company
as well as on a number of other Atlanta-area bank boards since the 1970s,
provides nearly 48 years of bank leadership experience to the Board of
Directors, as well as insight into the Atlanta region – an area of growth for
United. His perspective of bank formation, mergers, acquisition and
operation provides a unique perspective and background. Because of
this, and his 44 years of business and industrial experience, the Board believes
Mr. Stephens is well-suited for the Board of Directors.

Tim
Wallis

Director
since 1999

Age
58

Nominating/Corporate
Governance Committee

Compensation
Committee

Mr.
Wallis is owner and president of Wallis Printing in Rome,
Georgia. Prior to this he worked in production and sales at what was
then Brazelton-Wallis Printing Company from 1974 until 1985 when he became owner
and president. In addition to serving on the United Community Banks,
Inc. Board of Directors, Mr. Wallis also serves as chairman on the community
bank board of United Community Bank – Rome. He has served on the
board of directors of the Printing and Imaging Association of Georgia (PIAG) and
was chairman of the association’s Government Relations Committee. In
this capacity he worked directly with PIAG legislative liaisons at both the
state and national levels. Mr. Wallis currently serves on the Georgia
Chamber of Commerce board of directors. He also has served on the
Darlington School board of trustees, Georgia Southern College Foundation board
of trustees, Rome/Floyd YMCA board of trustees, and the United Way of Rome and
Floyd County board of trustees. He is a graduate of Georgia Southern
University.

Mr.
Wallis has been a community leader and long-term owner of a small
business. With United’s interest in small business and commercial
banking, Mr. Wallis brings a valuable perspective and insight to the
Board. His varied experience in a number of community boards, as well
as his service on the United Community Bank – Rome community bank board, gives
the Board a much needed focus on the needs of our mid-size banking communities
and the business owners within. For these reasons, and his experience
with statewide commerce, the Board believes Mr. Wallis is well-suited to serve
on the Board of Directors.

There are
no family relationships between any director, executive officer, or nominee for
director of United.

Director
Emeritus

The
Honorable Zell B. Miller, 77, serves as Director Emeritus of the Board of
Directors of United. This is an elected role by the Board that
provides leadership, counsel and guidance on various issues and policies that
could affect United. Prior to becoming a member of the U.S. Senate,
Mr. Miller served as a member of the Board of Directors of United from 1999 to
2000. Mr. Miller was a U. S. Senator from 2000 to 2005 and previously
served two terms as Governor and four terms as Lt. Governor of the State of
Georgia.

Board
of Directors

The Board
of Directors held fourteen meetings during 2009. All of the directors
attended at least 75 percent of the meetings of the Board and meetings of the
committees of the Board on which they served that were held during
2009. Directors are expected to be present at the Annual Meeting of
United.

9

Former
director A. William Bennett passed away on December 24, 2009. Mr.
Bennett was a member of the Audit, Nominating/Corporate Governance and
Compensation Committees. His contributions will be deeply
missed.

The Board
has considered and determined that a majority of the members of the Board of
Directors are independent as “independent” is defined under applicable federal
securities laws and the Nasdaq Listing Requirements. During 2009, the
independent directors were Directors Nelson, Bennett, Blalock, Cox, Holloway,
Stephens and Wallis. The independent directors meet in executive
sessions every quarter without management.

The Board
has elected Director Head and Director Nelson as Chairman and Vice Chairman,
respectively. The Board believes that its current leadership
structure is appropriate because Directors Head and Nelson are both skilled
businessmen with good judgment and are substantial shareholders of
United. As a result, they provide independent, shareholder-focused
leadership to United.

Risk
oversight of United is the responsibility of the Board of
Directors. It administers this oversight function by evaluating
various components of risks to the company at each meeting of the
Board. United believes that its Board leadership structure
facilitates careful oversight of risk to United. The structure of the
Board provides strong oversight by the independent directors, with the
independent directors meeting frequently in executive sessions of the Board
without management. These executive sessions allow the Board of
Directors to review key decisions and discuss matters in a manner that is
independent of senior management.

Board
Committees

The Board
currently has, and appoints members to, four standing committees: the
Executive Committee, Audit Committee, Nominating/Corporate Governance Committee
and the Compensation Committee. Each member of these Committees is
independent and each Committee has a charter approved by the Board, which is
available on United’s website, ucbi.com.

The
current members of the Committees are identified below (M - member; C -
chairman):

Name

Executive

Audit

Nominating/

Corporate Governance

Compensation

W.
C. Nelson, Jr.

M

C

M

M

Robert
H. Blalock

M

M

M

Cathy
Cox

M

M

C

Robert
L. Head, Jr.

C

Hoyt
O. Holloway

M

M

John
D. Stephens

M

M

Jimmy
C. Tallent

M

Tim
Wallis

M

M

10

Executive
Committee.

With
certain limited exceptions, the Executive Committee may exercise all the power
and authority of the Board of Directors in the management of the business and
affairs of United. The Committee facilitates quick decision-making
when it is not feasible to convene meetings of the entire Board of Directors or
when management needs the advice and counsel of Board members between meetings
of the Board. The Executive Committee met informally throughout 2009
but did not take any formal action during 2009.

Audit
Committee

The Audit
Committee assists the Board in its general oversight and serves as an
independent and objective party to monitor United’s financial reporting process
and internal control systems, to review and assess the performance of the
independent registered public accountants and internal auditing department, and
to facilitate open communication among the independent registered public
accountants, senior and financial management, the internal auditing department,
and the Board of Directors. Certain specific responsibilities of the
Audit Committee include recommending the selection of independent registered
public accountants, meeting with the independent registered public accountants
to review the scope and results of the annual audit, reviewing with management
and the internal auditor the systems of internal controls and internal audit
reports, ensuring that United’s books, records, and external financial reports
are in accordance with U.S. generally accepted accounting principles, and
reviewing all reports of examination made by regulatory authorities and
ascertaining that any and all operational deficiencies are satisfactorily
corrected.

The Board
of Directors has determined that all of the members of the Audit Committee have
sufficient knowledge in financial and accounting matters to serve on the audit
committee, including the ability to read and understand fundamental financial
statements. While the Board of Directors has determined that all of
the members of the Audit Committee are “financially sophisticated”, as defined
under the Nasdaq Listing Requirements, the Board of Directors does not believe
that any of the current members of the Audit Committee qualifies as an “audit
committee financial expert” in accordance with the applicable rules and
requirements of the SEC. Until his death in December 2009, former
director A. William Bennett was an audit committee financial
expert. As a result, United is actively seeking a potential new
member of the Board of Directors who meets this definition.

The Audit
Committee met eight
times during
2009.

Nomination/Corporate
Governance Committee

The
Nominating/Corporate Governance Committee reviews United’s Corporate Governance
Guidelines and policies and monitors compliance with those guidelines and
policies. In addition, the Nominating/Corporate Governance Committee
is responsible for identifying individuals qualified to become Board members and
recommending to the Board of Directors nominees for election and candidates for
each committee appointed by the Board. The Nominating/Corporate
Governance Committee met one time during 2009.

11

Vote
Required

Each
proxy executed and returned by a shareholder will be voted as specified thereon
by the shareholder. If no specification is made, the proxy will be
voted for the election of the nominees named above to constitute the entire
Board of Directors. If any nominee withdraws or for any reason is not
able to serve as a director, the proxy will be voted for such other person as
may be designated by the Board of Directors as a substitute nominee, but in no
event will the proxy be voted for more than eight
nominees. Management of United has no reason to believe that any
nominee will not serve if elected. All of the nominees are currently
directors of United.

Pursuant
to the Georgia Business Corporation Code, Directors are elected by a plurality
of the votes cast by the holders of the shares entitled to vote in an election
at a meeting at which a quorum is present, even though the nominees may not
receive a majority of the votes cast. However, as described in
“Corporate Governance – Majority Vote Requirement”, under certain instances,
nominees who are elected receiving less than a majority vote may be asked to
resign. A quorum is present when the holders of a majority of the
shares outstanding on the record date are present at a meeting in person or by
proxy. An abstention or a broker non-vote will be included in
determining whether a quorum is present at the meeting, but will not have any
other effect on the outcome of a vote.

Recommendation

The
Board of Directors unanimously recommends a vote “FOR” each nominee for
director.

12

CORPORATE
GOVERNANCE

Director
Nominations

General

The Board
of Directors nominates individuals for election to the Board based on the
recommendations of the Nominating/Corporate Governance Committee. A
candidate for the Board of Directors must meet the eligibility requirements set
forth in United’s Bylaws, Corporate Governance Guidelines and in any applicable
Board or committee resolutions.

Nominating/Corporate
Governance Committee Procedures

The
Nominating/Corporate Governance Committee considers qualifications and
characteristics that it, from time to time, deems appropriate when it selects
individuals to be nominated for election to the Board of
Directors. These qualifications and characteristics include, without
limitation, the individual’s interest in United, his or her United
shareholdings, independence, integrity, business experience, education,
accounting and financial expertise, age, diversity, reputation, civic and
community relationships, and knowledge and experience in matters impacting
financial institutions. In addition, prior to nominating an existing
director for re-election to the Board of Directors, the Nominating/Corporate
Governance Committee will consider and review an existing director’s Board and
committee attendance and performance.

Compensation
Committee

The
Compensation Committee is responsible for establishing and administering the
policies that govern the compensation arrangements for executive officers and
other senior officers. The Compensation Committee is also responsible
for oversight and administration of certain executive and employee compensation
and benefit plans, including the Amended and Restated 2000 Key Employee Stock
Option Plan (the “
Equity
Plan
”), the Deferred Compensation Plan and the Modified Retirement Plan,
and general compensation arrangements for all employees. It
periodically reviews and makes recommendations to the Board with respect to
Directors Compensation. The Compensation Committee met six times
during 2009.

Shareholder
Nominations

The Board
of Directors and Nominating/Corporate Governance Committee of the Board will
consider all director nominees properly recommended by any United shareholders
in accordance with the standards described above. Any shareholder
wishing to recommend a candidate for consideration as a possible director
nominee for election at an upcoming meeting of shareholders must provide timely,
written notice to the Board of Directors in accordance with the procedures
available on United’s website ucbi.com. The following is a summary of
these procedures:

●

In
order to be considered timely, a nomination for the election of a director
must be received by United no less than 120 days before the anniversary of
the date United’s proxy statement was mailed to shareholders in connection
with the previous year’s Annual Meeting.

●

A
shareholder nomination for director must set forth, as to each nominee
such shareholder proposes to nominate:

1.

the
name and business or residence address of the nominee;

2.

an
Interagency Biographical and Financial Report available from the Federal
Deposit Insurance Corporation completed and signed by the
nominee;

3.

the
number of shares of common stock of United which are beneficially owned by
the person;

4.

the
total number of shares that, to the knowledge of nominating shareholder,
would be voted for such person; and

5.

the
signed consent of the nominee to serve, if elected.

●

The
notice by a nominating shareholder shall also set
forth:

1.

the
name and residence address of such nominating shareholder;
and

2.

the
class and number of shares of common stock of United which are
beneficially owned by such
shareholder.

13

Notices
shall be sent to the Secretary, United Community Banks, Inc., P.O. Box 398,
Blairsville, Georgia 30514-0398. There were no director nominations
proposed for this year’s Annual Meeting by any shareholder.

Majority
Vote Requirement

United’s
majority vote policy states that nominees for director who are elected but
receive less than a majority of the votes cast for the election of directors may
be asked to resign. The policy allows the Board to waive this
majority vote requirement where a general campaign against the election of a
class of directors of public companies resulted in a United nominee being
elected with less than a majority vote without consideration of the particular
facts and circumstances applicable to the individual United
nominee. A waiver of the majority vote requirement will not be
permitted if the votes cast resulted from a campaign directed specifically
against the election of an individual United nominee, even in circumstances
where a majority of the Board of Directors disagrees with those voting against
that director’s election.

Code
of Ethical Conduct

United
has adopted a Code of Ethical Conduct designed to promote ethical conduct by all
of United’s directors and principal financial and executive
officers. The Code of Ethical Conduct complies with the federal
securities law requirement that issuers have a code of ethics applicable to
principal financial officers and with applicable Nasdaq Listing
Requirements. United’s Code of Ethical Conduct is available on its
website and was filed as Exhibit 14 to its Annual Report on Form 10-K for the
year ended December 31, 2003. United has not had any amendment to or
waiver of the Code of Ethical Conduct. If there is an amendment or
waiver, United will post any such amendment or waiver on the company’s website,
ucbi.com.

14

Shareholder
Communication

The Board
of Directors maintains a process for shareholders to communicate with the Board.
Shareholders wishing to communicate with the Board of Directors should send any
communication in writing to the Secretary, United Community Banks, Inc. P.O. Box
398, Blairsville, Georgia 30514-0398. Any such communication must
state the number of shares beneficially owned by the shareholder making the
communication. The communication will be forwarded to the full Board
of Directors or to any individual director or directors to whom the
communication is directed unless the communication is illegal or otherwise
inappropriate, in which case the communication will be disregarded.

Certain
Relationships and Related Transactions

United
has a written related person transaction policy that governs the review,
approval and ratification of any transaction that would be required to be
disclosed by United pursuant to Item 404 of Regulation S-K under the Securities
Act of 1933. The Board of Directors of United or the Audit Committee
must approve all such transactions under the policy.

Prior to
entering into such a related person transaction or an amendment thereof, the
Board or Audit Committee must consider all of the available relevant facts and
circumstances, including if applicable, benefits to United, the impact of a
transaction on a director’s independence, the availability of other sources for
comparable products or services, the terms of the transaction, and the terms
available to or from unrelated third parties or employees generally, as the case
may be. No member of the Board or Audit Committee shall participate in any
review, consideration, or approval of any related person transaction with
respect to which such member or any of his or her immediate family members is a
related person.

United’s
subsidiary bank has, and expects to have in the future, banking transactions in
the ordinary course of business with directors and officers of United and other
related persons, on the same terms (including interest rates and collateral) as
those prevailing at the time for comparable transactions with unaffiliated third
parties. Such transactions have not involved more than the normal
risk of collectability or presented other unfavorable features.

15

COMPENSATION
OF EXECUTIVE OFFICERS AND DIRECTORS

Compensation
Discussion and Analysis

Overview

The Compensation Committee of the Board
of Directors (the “
Committee
”)
has the important responsibility of ensuring that United’s executive
compensation policies and practices are based on three simple
principles:

●

Pay
competitively within our industry;

●

Pay
for appropriate performance based on pre-established goals;
and

●

Design
compensation programs with sound risk management practices and a balance
between short-term and long-term objectives that provide for value
creation for the company and our
shareholders.

In
addition to its focus on compensation matters, the Compensation Committee
occasionally recommends policies related to leadership development and employee
retention for consideration by the Board of Directors.

No
Compensation Committee member has been an officer or employee of United, and the
Board has considered and determined that all of the members are independent as
“independent” is defined under the Nasdaq Listing Requirements. Most
members of the Compensation Committee have a significant percentage of their net
worth invested in shares of United and all members have interests aligned with
the interests of other shareholders. The Compensation Committee’s
charter is available in the corporate governance section of United’s website,
ucbi.com.

To assist
in determining how best to achieve the above objectives, the Compensation
Committee previously conducted an interview process with several prominent
compensation consulting firms that had no previous relationships with United and
selected Towers Watson to advise it and the Board on executive
compensation. Towers Watson has provided no other non-executive
compensation consulting services to United.

The
Compensation Committee adopted and the shareholders approved the Management
Annual Incentive Plan in 2007. This “pay for performance” plan
governed the level of bonuses that could be awarded by the Compensation
Committee to senior executive officers during the past three
years. The initial performance parameters were set by the
Compensation Committee at the beginning of 2007, 2008 and 2009 and no bonuses
were paid for any year.

As a
result of United’s participation in the TARP Capital Purchase Program, United is
also subject to substantial limitations with respect to its executive
compensation practices.

Philosophy

United’s
compensation programs are designed to attract and retain key employees,
motivating them to achieve desired goals, both short and long-term, creating
expectations for positive results and rewarding them for strong
performance. Different programs are geared to short and long-term
performance with the goal of increasing shareholder value over the long
term. Because United believes the performance of every employee is
important to the company’s success, it is mindful of the effect of executive
compensation and incentive programs on all of its employees and tries to
establish programs that are fair in light of the compensation programs for all
other employees.

16

United
believes that the compensation of the company’s senior executives should reflect
their success as a management team and as individuals in attaining key operating
objectives, such as growth of revenue, loans and deposits; growth of earnings
and earnings per share; growth or maintenance of market share, long-term
competitive advantage, customer satisfaction and operating efficiencies; and,
ultimately, in attaining long-term growth in the market price of United’s
stock. At the same time, United does not believe its executive
compensation programs should encourage unnecessary or excessive
risks. United believes that the performance of its senior executives
in managing the company, considered in light of economic, industry and
competitive conditions, should be the basis for determining their overall
compensation.

United
also believes that their compensation should not be excessive or based on the
short-term performance of United’s stock, whether favorable or unfavorable, but
rather that the price of United’s stock will, in the long-term, reflect the
company’s operating performance, and ultimately, the management of the company
by its executives. United seeks to have the long-term performance of
its stock reflected in executive compensation through its stock option,
restricted stock and other equity incentive programs.

Regulatory
Limits

TARP Capital Purchase
Program
. On December 5, 2008, as part of the United States
Treasury Department’s (the “
Treasury
”)
TARP Capital Purchase Program (the “
CPP
”),
United entered into an Agreement (the “
Purchase
Agreement
”) with Treasury, pursuant to which United sold 180,000 shares
of Series B Cumulative Preferred Stock (the “
Series B
Preferred Stock
”) and a warrant to purchase shares of common stock for an
aggregate purchase price of $180 million in cash.

In the
Purchase Agreement, United agreed that, until such time as Treasury ceases to
own any securities of United acquired pursuant to the Purchase Agreement, United
will take all necessary action to ensure that its benefit plans with respect to
its senior executive officers comply with Section 111(b) of the Emergency
Economic Stabilization Act of 2008 (the “
EESA
”) as
implemented by any guidance or regulation under the EESA and agreed to not adopt
any benefit plans with respect to, or which covers, its senior executive
officers that do not comply with the EESA, and the applicable executives have
consented to the foregoing. Section 111(b)(2) of EESA provides for
the executive compensation and corporate governance standards to
include:

●

limits
on compensation that exclude incentives for senior executive officers of
financial institutions to take unnecessary and excessive risks that
threaten the value of the financial institution;

●

required
recovery of any bonus or incentive compensation paid to a senior executive
officer based on statements of earnings, gains, or other criteria that are
later proven to be materially inaccurate;

●

a
prohibition on the financial institution from making any “excess parachute
payment” to any senior executive officer, as defined under Section 280G of
the Internal Revenue Code (an “
Excess
Severance Payment
”) during the period that Treasury holds an equity
or debt position; and

●

an
agreement to limit a claim for a federal income tax deduction with respect
to a senior executive’s compensation that exceeds $500,000 per
year.

17

American Recovery and Reinvestment
Act.
On February 17, 2009, the American Recovery and
Reinvestment Act of 2009 (the “
ARRA
”) was
enacted. The ARRA imposed new executive compensation and corporate
expenditure limits on all TARP recipients until the institution has repaid
Treasury the amount of a CPP investment. The new ARRA standards that
apply to United and its senior executive officers include:

●

a
prohibition on bonuses, retention awards and other incentive compensation,
other than the granting of restricted stock awards which are limited to
one-third of an employee’s total annual compensation and further, that do
not fully vest while Treasury holds an investment;

●

a
prohibition on making any payments for departure from United other than
compensation earned for services rendered or accrued
benefits;

●

subjecting
bonus, retention awards and other incentive compensation to repayment
(clawback) if such payments were based on statements of earnings,
revenues, gains or other criteria that are later found to be materially
inaccurate;

●

a
prohibition on compensation plans that encourage manipulation of reported
earnings;

●

a
required company-wide policy regarding excessive or luxury expenditures
including office and facility renovations, aviation or other
transportation services and other activities or events that are not
reasonable expenditures for staff development, reasonable performance
incentives or similar measures in the ordinary course of business;
and

●

inclusion
of a “say-on-pay” proposal to a non-binding vote of shareholders at the
Annual Meetings, whereby shareholders vote to approve the compensation of
executives.

Amendments to Compensation
Arrangements.
As required by ARRA, a number of amendments were made to
our compensation program. The amendments include:

●

Bonuses,
retention awards and other incentive compensation payments to senior
executive officers have been prohibited while Treasury holds an
investment.

●

All
of the Named Executive Officers have executed a letter agreement waiving
their right to any severance payment that violates the
ARRA.

●

A
policy has been adopted that subjects to clawback any bonus payment or
award made while Treasury holds an investment based on materially
inaccurate financial statements or performance metrics. In
addition, all of the Named Executive Officers and other applicable
employees that could be one of the twenty most highly compensated
employees during the time that Treasury holds an investment have executed
a letter agreement agreeing to such clawback
policy.

Incentive Compensation Plan Risk
Assessment.
In addition to EESA and ARRA, the Securities and
Exchange Commission (the “
SEC
”) now
requires that the Compensation Committee review United’s compensation
arrangements with the members of management responsible for risk management for
all employees to determine if any such arrangements create risks that are
reasonably likely to have a material adverse effect on United. The
Compensation Committee also considered whether they encourage excessive or
unnecessary risk-taking by our senior executive officers. As part of
its review, the Compensation Committee considered the various risks to which
United is subject, including market, liquidity, interest rate, operational,
financial, credit quality and other risks, and how United’s incentive
compensation programs may contribute to risk. The Compensation
Committee also considered United’s controls and actions taken to mitigate and
monitor those risks.

18

As
previously described, because no bonuses, retention awards and other incentive
compensation payments may be made to senior executive officers while Treasury
holds an investment, the Compensation Committee determined that none of the
incentive compensation plans applicable to Named Executive Officers create or
encourage undue risks or are reasonably likely to have a material adverse effect
on United. Generally, the Compensation Committee concluded that
United’s incentive compensation programs applicable to Senior Management are
designed to encourage long-term growth and shareholder value-creation, the
delivery of superior customer service to promote core loan and deposit
growth.

United
maintains incentive compensation plans that pay loan and deposit production
incentives to bank personnel. Incentives are paid for various
measures of production consistent with United’s goals for the
year. As part of the Compensation Committee’s risk assessment, the
Committee noted that the incentive compensation plans for lenders presented
somewhat more risk than other plans because commissions were based on loan
production volume and constituted a higher portion of the company’s incentive
compensation expense than the other plans. However, as part of the
risk assessment, the Compensation Committee concluded that these plans do not
create risks that are reasonably likely to have a material adverse effect on
United because all loans must be approved by credit underwriting and, depending
on the size of the loan or credit relationship, bank management prior to being
made, and all incentive payments are subject to reduction at the discretion of
management for any reason in an amount up to 35% and in management’s discretion
in an amount up to 100% based on the historical performance of loans in each
lender’s loan portfolio. Nonetheless, as part of this review, the
Compensation Committee is in the process of implementing additional controls for
each loan production plan to ensure appropriate risk
mitigation. Specifically, incentive payments under these plans are
being adjusted so that they are subject to clawbacks and will be paid in
installments over the life of the loan so that the full incentive payment will
not be paid until the loan is repaid.

Administration

Generally,
the Compensation Committee reviews the performance and approves all compensation
of United’s senior executives and, based upon this evaluation, establishes their
compensation. For all senior executives other than the Chief
Executive Officer, the Chief Executive Officer makes recommendations to the
Compensation Committee.

Though
not members of the Compensation Committee in 2009, Jimmy Tallent, United’s Chief
Executive Officer, and Rex Schuette, United’s Executive Vice President and Chief
Financial Officer, were invited to most Compensation Committee meetings along
with Robert Head, Chairman of the Board of Directors, and Zell Miller, Director
Emeritus. Although all invitees may participate in discussions and provide
information that the Compensation Committee considers (except for discussions
with respect to any invitee’s own compensation, in which an executive does not
participate), invitees do not participate in voting and
decision-making.

In
setting and approving compensation of senior executives, the Compensation
Committee considers objective measurements of business performance, the
accomplishment of strategic and financial objectives, the development of
management talent within the company, and other matters relevant to the
short-term and the long-term success of the company and the enhancement of
shareholder value in the broadest sense. As described above, with respect to Mr.
Schuette, Mr. Freeman - United’s Executive Vice President and Chief Operating
Officer, Mr. Shearrow - United’s Executive Vice President and Chief Risk
Officer, and Mr. White - United’s President of the Atlanta Region (referred to
herein together with Mr. Tallent as the “
Named Executive
Officers
”), the Committee also considered the recommendations of Mr.
Tallent in 2009.

19

In
performing its responsibilities for executive compensation, the Compensation
Committee has sole authority to, and does to the extent it deems necessary or
desirable, retain and consult with outside professional
advisors. During 2009, Towers Watson advised the Compensation
Committee and the Board on executive compensation and the TARP restrictions and
limits on cash bonus, options and restricted stock. Towers Watson
reported directly to the Compensation Committee. Towers Watson
performed a study of the compensation of executive management of companies
within the industry and with companies of comparable size. The groups
used to compare executive compensation include (1) a peer group of 14 bank
holding companies with asset sizes ranging from $6.4 to $11.2 billion and a
median of $8.2 billion (the “
Peer
Group
”) and a reference group of nine bank holding companies with asset
sizes ranging from $11 to $14 billion with a median asset size of $12.9 billion
(the “
Reference
Group
”), approximately the asset size to which United may grow in the
next three to five years based on recent growth.
The Peer Group consisted
of Bank of Hawaii Corporation, Boston Private Financial Holdings, Inc., First
Midwest Bancorp, Inc., FirstMerit Corporation, International Bancshares
Corporation, MB Financial, Inc., Old National Bancorp, Pacific Capital Bancorp,
Provident Bancshares Corporation, Trustmark Corporation, UMB Financial
Corporation, Umpqua Holdings Corporation, United Bancshares, Inc. and Wintrust
Financial Corporation. The Reference Group consisted of BancorpSouth, Inc.,
Citizens Republic Bancorp, Inc., Cullen/Frost Bankers, Inc., South Financial
Group, Inc., Sterling Financial Corporation, Susquehanna Bancshares, Inc.,
Valley National Bancorp, Whitney Holding Corporation and Wilmington Trust
Corporation. The Compensation Committee also compared United’s executive
compensation to published executive compensation surveys, including bank holding
companies with similar asset sizes, compiled with the assistance of Towers
Watson (the “
Published
Surveys
”).

The
Compensation Committee compares the performance of United to the performance of
the companies in the Peer Group and Reference Group and establishes United’s
compensation practices similar to or more or less than such companies consistent
with its goal of competitively compensating United’s Named Executive Officers.
The Compensation Committee has attempted to compensate its Named Executive
Officers comparable to executive officers at Peer Group and Reference Group
companies but generally above the median compensation paid in each such
group. The Compensation Committee also uses Towers Watson’s analysis
to assist in determining the amounts of each element of
compensation.

Elements
of Compensation

Compensation
for each senior executive is allocated among annual base salary, annual
non-equity incentive awards and equity incentive awards. The
Compensation Committee chooses to pay each element of compensation in order to
attract, retain and motivate highly qualified executive talent, reward superior
annual performance and provide incentives for their balanced focus on long-term
strategic goals and increasing shareholder value as well as short-term
performance. The amount of each element of compensation is determined
by or under the direction of the Compensation Committee, which uses the
following factors to determine the amount of salary and other benefits to pay
each executive: performance against corporate and individual objectives for the
previous year; difficulty of achieving desired results in the coming year; value
of their unique skills and capabilities to support United’s long-term
performance; performance of their general management responsibilities; and,
contribution as a member of the executive management team.

Although
the Compensation Committee does not set overall compensation targets and then
allocate among the elements, it does review total compensation when making
decisions on each element of compensation to ensure that the total compensation
for each senior executive is justified and appropriate in the best interests of
the company.

20

Economic
conditions and the credit environment were very difficult throughout
2009. With the recession and unemployment worsening, business
activity across a wide range of industries and regions was greatly reduced and
local governments and businesses are in serious difficulty due to the lack of
consumer spending and the lack of liquidity in the credit
markets. This overall environment and difficulty in United’s markets,
particularly the Atlanta metropolitan area, has led to a decrease in real estate
values and an increase in United’s non-performing loans and
charge-offs. As a result, United incurred net losses of $228.3
million and $63.5 million for 2009 and 2008, respectively. These
losses were primarily due to higher credit costs in both years, goodwill
impairment charges in 2009 and net interest margin compression in
2008. Management took proactive steps in late 2008 and throughout
2009 to mitigate the credit issues, improve the net interest margin and control
expenses, but the overall performance for the company was disappointing for
2009.

As a
result, the Compensation Committee determined that for 2009, senior management
should be compensated with equity incentive awards for their efforts at
positioning United for improved long-term performance, but that cash
compensation should be tempered in light of actual 2009
performance. The Compensation Committee also believes that
compensation for United’s senior management should reflect the Board’s continued
confidence in and its desire to retain the current team to continue to manage
the company through these difficult times. The following is a summary
of the Compensation Committee’s actions during 2009 with respect to annual base
salary, non-equity incentive compensation awards and equity incentive
compensation awards.

Annual Base Salary
.
United strives to
provide its senior executives with a level of assured cash compensation in the
form of annual base salary that is competitive with companies in the financial
services industry and companies that are comparable in size and
performance.

The
Compensation Committee reviews base salaries annually and makes adjustments, in
light of past individual performance as measured by both financial and
non-financial factors and the potential for making significant contributions in
the future, to ensure that salary levels remain appropriate and
competitive. With respect to all senior executives, other than the
Chief Executive Officer, the Compensation Committee also considers Mr. Tallent’s
recommendations and assessment of each officer’s performance, his or her tenure
and experience in his or her respective positions, and internal comparability
considerations.

In 2009,
2008 and 2007, the Compensation Committee did not increase the annual base
salaries for any of the Named Executive Officers. Also, United did
not increase annual base salaries for any other members of senior management in
2009 and 2008. Further, for 2009, Mr. Tallent voluntarily requested
that his salary be reduced by $80,000; the Compensation Committee reluctantly
accepted his recommendation.

Non-Equity Incentive
Awards.
The
Compensation Committee believes that its senior management’s incentive
compensation should be linked directly to achievement of specified financial and
non-financial objectives. Under United’s Management Annual Incentive
Plan, the Compensation Committee strives to link salary and non-equity
incentives to objective standards of performance and may consider the
non-financial factors discussed earlier and various financial performance
measures, including operating and reported earnings per share; returns on
equity, tangible equity and assets; revenue, loan and deposit growth; operating
efficiency; loan and credit quality; and customer satisfaction
scores. In addition, the plan was designed to qualify for compliance
with the limitations on executive compensation deductions under Internal Revenue
Code Section 162(m).

21

In the
first quarter of 2009, the Committee established the performance parameters to
be used for 2009 under the Management Annual Incentive Plan, balancing the need
to reward and retain executive management in a challenging banking environment
with shareholders’ desire for strong financial performance with appropriate
risk.

The key
performance measure considered by the Committee for fiscal year 2009 was
pre-tax, pre-credit earnings, viewed as the primary quantitative performance
measure. Additionally, if the minimum threshold target was met, the
Committee had negative discretion to lower the targeted bonus level based on
several qualitative performance measures. The qualitative performance
measures included targeted levels of provision for loan losses, core deposit
growth, and headcount and expense reduction; net interest margin; operating
efficiency ratio; and customer satisfaction level.

To
receive a bonus award, pre-tax, pre-credit earnings must have reached a minimum
level of $75 million, and higher bonus awards could be paid if United achieved
$125 million in pre-tax, pre-credit earnings for the
year. Participants could have earned from 45 percent to 200 percent
of their base salary, depending upon achievement against the performance
thresholds. If the minimum or a higher targeted level of pre-tax,
pre-credit earnings was met, the bonus award could be reduced by the Committee
based on the collective performance of the qualitative measures discussed
above. The actual pre-tax, pre-credit earnings for 2009 was $110.7
million.

Even
though the primary measure was above the minimum level, the other financial
performance measures were not met during 2009. Therefore, the
Compensation Committee did not grant non-equity incentive compensation awards or
cash bonuses in 2009 to any Named Executive Officers or any other member of
senior management. Also, United did not grant non-equity incentive
compensation awards or cash bonuses to the Named Executive Officers in 2008 or
2007.

Equity Incentive
Awards.
An important element of compensation in the banking
industry is the provision of long-term incentives in the form of equity awards
such as stock options, restricted stock, and restricted stock units. United also
regards equity incentive awards as a key retention tool. These
considerations are paramount in the Compensation Committee’s determination of
the type of an award to grant and the number of underlying awards to be
granted. Because of the direct relationship between the value of an
option and the market price of United’s common stock, United believes that
granting stock options is the best method of motivating executive and other
senior management to manage the company in a manner that is consistent with the
long-term interests of United’s shareholders.

Equity
incentive awards are granted under the Equity Plan, which is a broad-based,
shareholder approved plan covering Named Executive Officers, other members of
senior management and other key management personnel. The Equity Plan
permits United to grant stock options, restricted stock and restricted stock
units and provides additional flexibility, if circumstances of United’s business
and opportunities warrant, to grant other forms of equity-based
compensation.

The
Equity Plan does not permit the grant price for options to be reduced after the
initial grant date. Because participants may not exercise options
until they vest and because the exercise price of the options is the fair market
value of the underlying stock on the date of grant, participants do not realize
any benefit from stock options unless United’s stock price appreciates prior to
their maturity.

During
2009, options to acquire 354,450 (357,261 adjusted for subsequent 2009 stock
dividends) shares of common stock were awarded by the Compensation Committee,
none of which were awarded to the Named Executive
Officers. Additionally, 106,000 (107,669 adjusted for subsequent 2009
stock dividends) restricted stock awards were awarded during 2009, including
100,000 (101,545 adjusted for subsequent 2009 stock dividends) restricted stock
units awarded to the Named Executive Officers.

22

Retirement
and Other Benefits.

The
Compensation Committee believes that retirement and deferred compensation
benefits provide financial security to senior management and their families for
their service to the company. As a result, United has adopted the
following two plans:

Modified Retirement
Plan
. United maintains a modified retirement plan (the “
Modified
Retirement Plan
”) for certain Named Executive Officers and other key
personnel. See the disclosure provided in “Executive Compensation –
Pension Benefits” for a description of the material terms of the Modified
Retirement Plan and disclosure of 2009 benefits provided to the Named Executive
Officers under the Modified Retirement Plan.

Deferred Compensation
Plan
. In addition, United maintains a deferred compensation
plan (the “
Deferred
Compensation Plan
”) for senior management, members of the Board of
Directors, members of United’s local community bank boards and certain other key
personnel. See the disclosure provided in “Executive Compensation –
Nonqualified Deferred Compensation” for a description of the material terms of
the Deferred Compensation Plan and disclosure of 2009 benefits provided to the
Named Executive Officers under the Deferred Compensation Plan.

Perquisites
and Other Benefits.

The
perquisites provided to United’s Named Executive Officers in 2009 were the use
of a company-owned car or a car allowance and the payment of the dues for club
memberships that are not used exclusively for business
purposes. These personal benefits are generally provided to similarly
situated financial institution executives in the company’s market areas, and
United believes it is appropriate to award its senior executives similar
benefits.

United
also provides matching contributions of up to 5% of the bonus contributions to
the Deferred Compensation Plan. United’s Named Executive Officers
also participate in company-wide contributions to the 401(k) Plan and receive
other benefits on the same terms as other employees, which plans include
medical, dental and life insurance.

Severance
Benefits.

Generally,
options and restricted stock/unit grants continue to vest for United’s Named
Executive Officers in the event of the officer’s termination without cause or a
termination by the officer for Good Reason (as defined in the award
agreements). Mr. White’s option grants are accelerated upon a change
in control. Otherwise, options and restricted stock awards cease
vesting upon termination of employment.

As
required by the acquisition agreement pursuant to which United acquired Gwinnett
Commercial Group, United entered into an Employment Agreement with Mr. White
consistent with an existing agreement he had with such company. See
the disclosure provided in “Executive Compensation – Agreements with Executive
Officers” for a description of the material terms of such agreement, including
severance benefits to Mr. White under certain circumstances. As
previously described, all of the Named Executive Officers have executed a letter
agreement waiving their right to any severance payment that violates the
ARRA.

United
does not provide for any other severance benefits to its Named Executive
Officers, except as described below.

23

Benefits
Upon a Change in Control

United’s
senior management has substantially contributed to the success of United, and
the company believes that it is important to protect them in the event of a
change in control. Further, it is United’s belief that the interests
of shareholders will be best served if the interests of its senior management
are aligned with them, and providing change in control benefits should reduce
any reluctance of senior management to pursue potential change in control
transactions that may be in the best interests of shareholders.

For that
reason, United’s Named Executive Officers have each entered into agreements with
the company, the terms of which are described in “Executive Compensation -
Agreements with Executive Officers and Post-Employment Compensation”. The
Compensation Committee has established the payment and benefit levels to be paid
to the Named Executive Officers following a change in control under these
agreements consistent with what the Compensation Committee believes is standard
for financial institution executives in the markets in which United
operates.

Based
upon (1) a hypothetical change in control and (2) the termination of our Named
Executive Officers as of December 31, 2009, all payments of compensation and
benefits under the agreements with such officers that would be payable in a lump
sum (except for Mr. White, who would be paid in 24-monthly installments) and
capped at the following approximate amounts: Mr. Tallent $2,362,106; Mr. Freeman
$1,494,556; Mr. Schuette $1,049,841; Mr. Shearrow $1,089,656 and Mr. White
$2,367,571. The Compensation Committee believes that these potential
benefits would be minor relative to the substantial transaction value for
United’s shareholders. Without the cap, the payments of salary, bonus
and benefits would have exceeded such amounts.

None of
these payments would be considered Excess Parachute Payments but all of such
payments by United would be prohibited by the ARRA during the time Treasury owns
the preferred stock it purchased under CPP. As previously described,
all of the Named Executive Officers have executed a letter agreement waiving
their right to any severance payment that violates the ARRA.

24

Executive
Compensation

Summary
Compensation Table

The
following table sets forth the compensation paid during the past three years to
the Named Executive Officers.

SUMMARY
COMPENSATION TABLE

Name
and principal position

Year

Salary
(1)

Bonus
(1)

Restricted

stock

awards
(2)

Stock

option

awards
(2)

Non-Equity

incentive
plan

compensation
(3)

Change
in

pension
value

and
deferred

compensation

earnings
(4)

All
other
(5)

Total

Jimmy
C. Tallent

2009

$

400,000

$

-

$

199,877

$

-

$

-

$

185,649

$

78,581

$

864,107

President
and

2008

480,000

-

54,984

130,128

-

68,484

80,086

813,682

Chief
Executive Officer

2007

480,000

-

107,364

288,895

-

47,483

95,379

1,019,121

Guy
W. Freeman

2009

295,000

-

157,050

-

-

(6,616

)

48,349

493,783

Executive
Vice President

2008

295,000

-

62,097

69,091

-

82,239

49,654

558,081

and
Chief Operating Officer

2007

295,000

-

122,685

177,471

-

84,187

50,722

730,065

Rex
S. Schuette

2009

283,000

-

142,772

-

-

185,671

27,471

638,914

Executive
Vice President

2008

283,000

-

48,299

58,800

-

54,432

27,604

472,135

and
Chief Financial Officer

2007

283,000

-

107,364

152,709

-

53,995

33,450

630,518

David
P. Shearrow

2009

275,000

-

142,772

-

-

29,117

19,225

466,114

Executive
Vice President

2008

275,000

-

48,299

58,800

-

12,218

14,863

409,180

and
Chief Risk Officer

2007

195,000

145,000

499,460

171,842

-

7,488

84,893

1,103,683

Glenn
S. White

2009

320,000

-

71,390

-

-

-

29,624

421,014

President,

2008

320,000

-

41,394

44,098

-

-

34,454

439,946

Atlanta
Region
(6)

________________________

(1)

Amounts
shown for salary and bonus were either paid in cash or deferred, as
elected by the executive under the Deferred Compensation
Plan. See the “Nonqualified Deferred Compensation – Activity
For 2009” table for the executive’s contributions and
earnings.

(2)

The
amounts shown reflect the aggregate grant date fair value of the
awards. The assumptions made when calculating the grant date
fair value of options are found in Note 20 to the Consolidated
Financial Statements of United contained in its Annual Report on Form
10-K for the year ended December 31, 2009. Mr. Shearrow’s 2007
restricted stock award was granted as an inducement to his employment by
United to replace certain unvested stock awards forfeited at his previous
employer.

(3)

Non-equity
incentive plan compensation includes amounts earned under the Management
Annual Incentive Plan as a result of achieving the goals specified for the
designated year. Because the financial performance measures
were not met for 2009, 2008 and 2007, no non-equity incentive compensation
awards were granted by the Compensation Committee.

(4)

Includes
the annual change in the present value of the executive’s accumulated
benefits under the Modified Retirement Plan. The change in
value for 2009 reflects the actuarial charge for the increase in benefits
provided to Mssrs. Tallent, Schuette and Shearrow.
See the “Pension
Benefits” and “Nonqualified Deferred Compensation – Activity For 2009”
tables for additional information. The Deferred Compensation
Plan does not credit above-market or preferential earnings, so no amounts
are included in this column with respect to the Deferred Compensation
Plan.

(5)

Amounts
shown include: (i) matching 401(k) and profit sharing contributions to the
401(a) Plan on behalf of the executive; (ii) matching 401(k) contributions
on behalf of the executive to the Deferred Compensation Plan (see the
“Nonqualified Deferred Compensation – Activity For 2009” table for
additional information); (iii) the value of personal travel or allowance
for a company-owned car; (iv) club membership dues that are not used
exclusively for business purposes; (v) dividends on unvested restricted
stock awards; (vi) life insurance premiums paid on behalf of the
executive; and, (vii) directors fees paid to the executive for serving on
subsidiary and community bank boards. Certain executives
received directors fees in 2009, 2008 and 2007, respectively, of $37,400,
$33,800 and $43,850 for Mr. Tallent; $7,400, $7,400 and $7,500 for
Mr. Freeman; and, $3,000 and $6,000 in 2009 and 2008, respectively,
for Mr. White. Mr. Shearrow also received a cash payment of
$60,000 in 2007 to replace certain unvested restricted stock awards that
were forfeited at his previous employer as an inducement to his employment
by United.

(6)

Mr.
Shearrow joined United in April 2007 and Mr. White became an executive
officer of United in 2008.

25

Stock
Option and Restricted Stock Grants

The
following table sets forth information with respect to restricted stock and
stock option awards granted to the Named Executive Officers for 2009 (as
adjusted for 2009 stock dividends):

GRANTS
OF PLAN-BASED AWARDS

Stock
option awards

Grant
date

Number
of

restricted
stock units
(1)

Number

Exercise
price

Closing
price

on
grant date

Mr.
Tallent

May
5, 2009

28,432

None

–

–

Mr.
Freeman

May
5, 2009

22,340

None

–

–

Mr.
Schuette

May
5, 2009

20,309

None

–

–

Mr.
Shearrow

May
5, 2009

20,309

None

–

–

Mr.
White

May
5, 2009

10,155

None

–

–

___________________

(1)

The
restricted stock units vest in equal installments over a four-year period
beginning on January 31, 2010. The grant date fair value was
$7.03 per share.

When
granting equity awards, the Compensation Committee sets option exercise prices
at the market closing price on the date of grant. Both stock options
and restricted stock awards vest over a number of years in order to encourage
employee retention and focus management’s attention on sustaining financial
performance and building shareholder value over an extended
term. Typically, vesting is in equal increments over a four-year
period from the date of the grant.

During
2009, United did not grant stock options, stock appreciation rights or similar
awards to any of its executive officers.

Stock
Option Exercises and Restricted Stock Vesting

The
following table sets forth the value realized upon the exercise of stock options
and the vesting of restricted stock awards or settlement of restricted stock
units for the Named Executive Officers during 2009 (as adjusted for subsequent
2009 stock dividends):

OPTION
EXERCISES AND VESTING OF RESTRICTED STOCK

Stock
option awards

Restricted
stock/unit awards

Name

Number
exercised

Value
realized
(1)

Number
vesting

Value
realized
(2)

Mr.
Tallent

-

-

3,896

$

22,354

Mr.
Freeman

-

-

3,766

22,168

Mr.
Schuette

-

-

3,312

19,091

Mr.
Shearrow

-

-

7,352

38,604

Mr.
White

-

-

780

6,419

___________________

(1)

Represents
the difference between the closing price of United’s common stock on the
date of exercise and the per share option exercise price, multiplied by
the number of options exercised.

(2)

Represents
the value realized by multiplying the number of restricted stock/unit
awards vesting by the closing price of United’s common stock on the date
of vesting.

26

Outstanding
Equity Awards as of December 31, 2009

The
following table sets forth, for each Named Executive Officer, the number of
stock options exercisable and unexercisable and the number and value of unvested
restricted stock awards as of December 31, 2009 (as adjusted for subsequent 2009
stock dividends):

OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END

Stock
options

Restricted
stock awards

Name

Number

exercisable

Number

unexercisable
(1)

Exercise

price

Expiration

date
(2)

Number

not
vested
(3)

Market
value

not
vested
(4)

Mr.
Tallent

37,406

-

$

12.19

4/20/10

46,758

-

11.22

4/18/11

62,344

-

12.50

3/11/12

46,758

-

15.78

4/17/13

17,663

-

22.85

6/7/14

21,198

-

22.24

5/16/15

24,157

8,053

27.76

4/26/16

18,183

18,183

29.52

4/25/17

11,689

35,069

13.23

4/30/18

286,156

61,305

34,145

$

115,752

Mr.
Freeman

6,235

-

12.19

4/20/10

8,017

-

11.22

4/18/11

24,938

-

12.50

3/11/12

31,172

-

15.78

4/17/13

10,391

-

22.85

6/7/14

13,507

-

22.24

5/16/15

15,585

5,196

27,76

4/26/16

11,170

11,170

29.52

4/25/17

6,104

18,314

13.28

5/5/18

127,119

34,680

28,702

­­­97,300

Mr.
Schuette

35,847

-

11.22

3/12/11

18,703

-

11.22

4/18/11

24,937

-

12.50

3/11/12

28,056

-

15.78

4/17/13

9,352

-

22.85

6/7/14

12,469

-

22.24

5/16/15

13,638

4,547

27.76

4/26/16

9,611

9,612

29.52

4/25/17

5,195

15,586

13.28

5/5/18

157,808

29,745

25,633

86,896

Mr.
Shearrow

10,390

10,391

30.23

4/16/17

5,195

15,586

13.28

5/5/18

15,585

25,977

29,791

100,991

Mr.
White

-

25,976

29.64

6/1/17

3,896

11,689

13.28

5/5/18

3,896

37,665

22,883

77,573

___________________

(1)

With
the exception of Mr. White’s stock options that expire on June 1, 2017,
stock options become exercisable in four equal annual installments
beginning on the first anniversary of the grant date. Mr.
White’s stock options that expire on June 1, 2017, vest as follows: 12,988
on June 1, 2010, 6,494 on June 1, 2011 and 6,494 on June 1,
2012.

(2)

The
expiration date of each stock option is 10 years after the date of
grant.

(3)

With
the exception of Mr. Shearrow’s restricted stock units granted on April
16, 2007 and Mr. White’s restricted stock units granted on June 1, 2007,
restricted stock shares and units vest in four equal annual installments,
beginning January 31 of the year following the grant date. Mr.
Shearrow’s 6,755 unvested restricted stock shares granted on April 16,
2007 vested on January 31, 2010 and Mr. White’s unvested restricted stock
units granted on June 1, 2007 vest on June 1, 2012.

(4)

The
market value is based on the closing price of United’s common stock at
December 31, 2009 of $3.39, multiplied by the number of unvested shares
subject to the awards.

27

Equity
Compensation Plan Information at December 31, 2009

The
following table provides information about stock options outstanding as of
December 31, 2009 and stock options and/or equity awards available to be granted
in future years (adjusted for subsequent 2009 stock dividends):

EQUITY
COMPENSATION PLAN INFORMATION

Total

outstanding

options

Weighted-average

exercise
price of

outstanding
options

Number
available

for
issuance

under
equity compensation

plans
(1)

Equity
compensation plans approved by shareholders

3,759,566

$

17.68

996,132

Equity
compensation plans not approved by shareholders
(2)

71,446

8.03

-

Total

3,831,012

17.50

996,132

_____________________

(1)

Represents
the number of stock options or equity awards available to be granted in
future years under the Existing Equity Plan.

(2)

Stock
options granted under plans assumed by United through acquisitions prior
to December 1, 2004. Such were frozen as to future grants at
the time of the acquisitions.

Pension
Benefits

The
following table presents selective retirement benefit information for 2009 for
each Named Executive Officer that was a participant in Modified Retirement
Plan.

PENSION
BENEFITS

Name

Plan
name

Number
of

years
of

credited

service

Present
value

of

accumulated

benefit

Payments

during

2009

Mr.
Tallent

Modified
Retirement Plan

26

$

558,054

-

Mr.
Freeman

Modified
Retirement Plan

15

586,790

-

Mr.
Schuette

Modified
Retirement Plan

9

464,979

-

Mr.
Shearrow

Modified
Retirement Plan

3

48,823

-

The
Modified Retirement Plan provides specified benefits to certain key officers who
contribute materially to the continued growth, development and future business
success of United and its subsidiaries. Generally, when a participant
retires, United will pay to the participant a fixed annual amount in equal
installments either (1) for the lifetime of the participant and, if the
participant is married upon death, a lesser lifetime amount to the participant’s
spouse, or (2) a fixed payment for 15 years. The annual benefits,
based on seniority and position, range from $25,000 to $120,000 per year and
are
taxable to the
participant. The normal retirement age defined in the plan is age 65
and completion of five years of service.

The
Modified Retirement Plan contains provisions that provide for accelerated
vesting upon a change in control of United. The Modified Retirement
Plan also provides that these benefits will be forfeited if a participant is
terminated for cause or, if during a certain period after his or her termination
of employment, competes with United, solicits customers or employees, discloses
confidential information, or knowingly or intentionally damages United’s
goodwill or esteem.

28

Nonqualified
Deferred Compensation

The
following table presents information for each Named Executive Officer relating
to the Deferred Compensation Plan.

NONQUALIFIED
DEFERRED COMPENSATION – ACTIVITY FOR 2009

Name

Executive

contributions
(1)

Company

contributions
(2)

Account

Earnings

Withdrawals/

distributions

Balance
at

year-end

Mr.
Tallent

$

17,479

$

7,750

$

(207,591

)

$

-

$

285,500

Mr.
Freeman

9,998

2,500

(5,828

)

-

23,846

Mr.
Schuette

16,368

1,900

(154,170

)

-

73,548

Mr.
Shearrow

40,596

1,500

(46,002

)

-

58,011

Mr.
White

-

-

76,806

-

346,351

___________________

(1)

All
executive contributions are included in the amounts under the column
headings “Salary”, “Bonus” and “Restricted stock awards” in the “Summary
Compensation Table”.

(2)

All
company contributions are included in the amounts under the column heading
“All other” in the “Summary Compensation
Table”.

The
Deferred Compensation Plan provides for the deferral of up to 75% of annual base
salary and up to 100% of annual cash bonus payments or non-equity incentive
compensation awards and other specified benefits to selected individuals who
contribute materially to the continued growth, development and future business
success of United and its affiliates. Further, the Deferred
Compensation Plan allows for employer matching contributions for employee
contributions that would have been paid under United’s tax-qualified 401(k) plan
(the “
401(k)
Plan
”) if such matching contributions would otherwise exceed the maximum
allowable amounts under the 401(k) Plan and matching of deferred bonuses, dollar
for dollar up to 5% of bonus or non-equity incentive compensation award, subject
to the same vesting provisions of the 401(k) Plan. Although the Plan
allows the Board of Directors to make discretionary contributions to the account
of employee participants, the Board has never made any such discretionary
contributions. The Deferred Compensation Plan also provides for the
deferral of up to 100% of director fees for service by a non-employee director
on the board of United or any subsidiary or community bank.

Contributions
to the Deferred Compensation Plan may be invested in United’s common stock and a
portfolio of various mutual funds. Participants are 100% vested in
their contributions, including earnings or losses thereon. Company
contributions, including earnings and losses thereon, vest over a three-year
period. Because the amounts deferred under the plan are invested in the
underlying mutual fund or, in the case of United common stock, recorded as
common stock issuable (an equity instrument) at the time of the investment,
there are no potential future costs of the plan known at this time.

Generally,
when a participant retires or becomes disabled, United will pay the participant
their accrued benefits in a lump sum or in equal installments for 5, 10, or 15
years. Alternatively, a participant may elect to have a portion (or
all) of their accrued benefits paid out at a specified time before retirement in
a lump sum or in annual installments for 2, 3, 4, or 5 years. The
benefit payments are taxable to the participant.

29

Agreements
with Executive Officers and Post-Employment Compensation

Messrs.
Tallent, Freeman, Schuette, and Shearrow have each entered into Amended and
Restated Change in Control Severance Agreements with United. The
agreements remain in effect until the termination of such executive’s employment
without entitlement to the benefits under the agreement, unless earlier
terminated by mutual written agreement of the executive and United.

The
Amended and Restated Change in Control Severance Agreements provide for payment
of compensation and benefits to the executive in the event of a “Change in
Control” of United if the executive’s employment is involuntarily terminated by
United without “Cause” or if the executive terminates his employment for “Good
Reason”. The executive is not entitled to compensation or payments
pursuant to the Amended and Restated Change in Control Severance Agreement if he
is terminated by United for Cause, dies, incurs a disability, or voluntarily
terminates employment (other than for Good Reason). If a Change in Control
occurs during the term of the agreement and the executive’s employment is
terminated within six months prior to, or 18 months following, the date of the
Change in Control, and if such termination is an involuntary termination by
United without Cause (and does not arise as a result of death or disability) or
a termination by the executive for Good Reason, the executive will be entitled
to a lump sum payment equal to his base salary, non-equity incentive
compensation award and certain other benefits, as determined by the agreement,
for a period of 36 months from the date of his termination. The lump
sum payment of medical benefits also includes a tax-gross up.

The
Amended and Restated Change in Control Severance Agreements were entered into as
of December 31, 2008 (with minor changes from the prior agreements) and are
intended to ensure that the payment of any compensation or benefits under the
agreement would comply with Internal Revenue Code Section 409A (“
Section
409A
”).

As
required by the acquisition agreement pursuant to which United acquired Gwinnett
Commercial Group, United entered into an Employment Agreement with Mr. White
consistent with an existing agreement he had with such company that provides for
a rolling three-year term unless either party gives the other party notice that
the term will not be extended. The agreement generally provides that,
if Mr. White is terminated at any time by United without Cause, or Mr. White
terminates his employment with United for Cause, Mr. White will receive his base
salary for a period of 36 months and an amount equal to two times his annual
bonus or non-equity incentive compensation award. Additionally, if,
within six months following a Change of Control of United, either Mr. White
terminates his employment or United terminates Mr. White other than for Cause,
the agreement provides for a payment made over 24 monthly installments equal to
three times the sum of his base salary then in effect, an amount equal to his
average annual bonus or non-equity incentive compensation award of the three
most recent years and his monthly automobile allowance multiplied by
twelve.

The
Employment Agreement also includes covenants by Mr. White not to compete with
United or solicit its customers or prospective customers or employees for 36
months after the termination of his employment under certain
circumstances.

A “Change
in Control” under the agreements generally means the acquisition by any person
of beneficial ownership of 20 to 25% or more of the voting power of United’s
outstanding stock, approval by shareholders of a merger or consolidation or a
complete liquidation or dissolution of United or an agreement for the sale or
other disposition of all or substantially all of the assets of United, or a
majority change in the composition of the Board of Directors. “Cause”
with respect to a termination by United under the agreements is generally
defined as the involuntary termination of the executive by United as result of
an uncured breach of the employment agreement by Mr. White, commission of
certain crimes, act or acts which are in violation of policies of United or the
failure by the executive to perform his duties. “Cause” with respect
to termination by Mr. White is generally defined as an uncured breach of the
employment agreement by United, a material adverse diminution in his powers,
responsibilities, or duties, or the required relocation of the executive to a
location more than 20 miles from his existing business
location. “Good Reason” for termination by an executive under the
Amended and Restated Change in Control Agreement is generally defined as the
occurrence during the six month period prior to, or within the 18 month period
following, the date of a Change in Control, of a substantial adverse change in
the executive’s responsibilities, the required relocation of the executive to a
location outside of the market area of United, a material reduction in the
levels of coverage of the executive under United’s director and officer
liability insurance policy or indemnification commitments, or a reduction in the
executive’s compensation or benefits.

30

All of
the agreements provide that the compensation and benefits provided for under the
agreement shall be reduced or modified so as to insure that United does not pay
an Excess Severance Payment. If a reduction is necessary, the
agreements would allow the executive to choose the manner in which the payments
would be modified so long as the total payments are capped to avoid being
treated as an Excess Severance Payment. None of the agreements
provide for the payment of any taxes or a gross-up of payments to pay any taxes
in the event any of the compensation or benefits were considered to be an Excess
Severance Payment.

Each of
United’s Named Executive Officers executed a waiver in connection with United’s
participation in the CPP pursuant to which they have voluntarily waived any
claim against Treasury or United for any changes to such senior executive
officer’s compensation or benefits that are required to comply with the
limitations contained in the EESA, ARRA or any regulation
thereunder. The limitations are described in “Compensation Discussion
and Analysis – Regulatory Limits”, and, as described therein, all of the Named
Executive Officers have executed a letter agreement waiving their right to any
severance payment that violates the ARRA.

United
has no other employment or severance agreements with any of its Named Executive
Officers.

Director
Compensation

Non-employee
Directors of United received an annual retainer of $20,000 and a separate
meeting fee of $3,000 for each of the five regularly scheduled Board meetings
attended during 2009. The members of the Audit Committee received a
separate meeting fee of $500 per regularly scheduled meeting
attended. The Chairmen of the Audit and Compensation Committees each
received an additional annual retainer of $5,000. Executive officers
who serve as directors do not receive compensation for service on the Board of
Directors of United. Certain members of United’s Board of Directors
and its executive officers also serve as members of one or more of United’s
subsidiaries and community banks boards of directors for which they are
compensated.

The
annual retainer and meeting fees are payable in cash or may be deferred pursuant
to United’s Deferred Compensation Plan. In 2009, Director Bennett
elected to defer a portion of his retainer and meeting fees.

In
addition to the retainers and meeting fees listed above, United reimburses the
non-employee Directors for their travel expenses incurred in attending meetings
of the Board or its Committees, as well as for fees and expenses incurred in
attending director education seminars and conferences. Directors did
not receive any restricted stock, stock option or other equity awards or any
other personal benefits in 2009.

31

The table
below presents a summary of non-employee Director compensation for
2009:

DIRECTOR
COMPENSATION

Name

Fees
earned or

paid
in cash

Nonqualified

deferred

compensation

earnings

All
other

compensation
(1)

Total

Robert
L. Head, Jr.

$

35,000

$

42,551

$

12,000

$

89,551

W.C.
Nelson, Jr.

42,500

65,651

12,000

120,151

A.
William Bennett
(2)

42,500

(48,349

)

-

(5,849

)

Robert
Blalock

37,500

-

10,500

48,000

Cathy
Cox

36,875

-

-

36,875

Charles
E. Hill
(3)

8,750

-

-

8,750

Hoyt
O. Holloway

35,000

-

6,000

41,000

John
D. Stephens

35,000

-

3,000

38,000

Tim
Wallis

36,250

(11,036

)

6,000

31,214

Zell
Miller
(4)

35,000

14,752

-

49,752

___________________

(1)

Directors
fees for serving on one or more of United’s subsidiary or community bank
boards of directors.

(2)

Former
director A. William Bennett passed away on December 24,
2009.

(3)

Director
Hill retired from the board of directors effective February 6,
2009.

(4)

Director
emeritus.

Compensation
Committee Interlocks and Insider Participation

No member
of the Compensation Committee has served as an officer or employee of United at
any time or engaged in any transaction that would be required to be disclosed
under “Certain Relationships and Related Transactions”.

None of
United’s executive officers serve as a director or member of the compensation
committee of any other entity that has an executive officer serving as a member
of United’s Board of Directors or Compensation Committee.

32

Compensation
Committee Report

The
Compensation Committee has reviewed and discussed the “Compensation Discussion
and Analysis” included with this proxy statement with
management. Based on such review and discussions, the Compensation
Committee recommended to the Board of Directors that it be included
herein.

In
addition, the Compensation Committee met with United’s senior risk officers to
review United’s incentive compensation plans for all employees. Based
on such review and discussions, the Compensation Committee certifies that: (1)
it has reviewed with senior risk officers the incentive compensation
arrangements with senior executive officers and has made all reasonable efforts
to ensure that such arrangements do not encourage senior executive officers to
take unnecessary and excessive risks that threaten the value of United; (2) it
has reviewed with senior risk officers the employee compensation plans and has
made all reasonable efforts to limit any unnecessary risks these plans pose to
United; and (3) it has reviewed the employee compensation plans to eliminate any
features of these plans that would encourage the manipulation of reported
earnings of United to enhance the compensation of any employee.

Cathy
Cox, Chairman

Robert H.
Blalock

Hoyt O.
Holloway

W.C.
Nelson

John D.
Stephens

Tim
Wallis

33

PRINCIPAL
AND MANAGEMENT SHAREHOLDERS

The
following table sets forth information regarding beneficial ownership of
United’s common stock as of March 27, 2010 and is based on 94,175,857
shares of United’s common stock outstanding on such date. Beneficial
ownership includes any shares as to which the individual or entity has sole or
shared voting power or investment power and any shares as to which the
individual or entity has the right to acquire beneficial ownership with 60 days
of March 27, 2010, through the exercise of any stock option or other right,
and any shares that are pledged as security pursuant to various financial
obligations. The table sets forth such information with respect
to:

●

each
shareholder who is known by us to beneficially own 5% or more of the
common stock;

●

each
director;

●

each
Named Executive Officer; and

●

all
executive officers and directors as a
group.

Unless
otherwise indicated, each of the shareholders has sole voting and investment
power with respect to the shares of common stock beneficially owned by such
shareholder.

BENEFICIAL
OWNERSHIP

Name

Number
of

shares
of

common

stock
owned

directly
or

indirectly

Number
of

shares
underlying

options
exercisable

within
60

days

Number
of

shares
of

beneficially
owned

restricted

stock

Number
of

shares
issuable

under
the

Deferred

Compensation

Plan

Number
of

shares

underlying

warrants

Total

number
of

shares

beneficially

owned

Percentage

beneficially

owned

BlackRock,
Inc.
(1)

5,587,770

5,587,770

5.81

%

Elm
Ridge Capital Management LLC
(2)

4,919,800

4,919,800

5.11

%

Jimmy
C. Tallent
(3)

598,319

347,461

31,418

25,685

8,750

1,011,633

1.05

%

Robert
L. Head, Jr.
(4)

1,989,875

75,000

2,064,875

2.15

%

W.C.
Nelson, Jr.
(5)

2,023,372

50,000

2,073,372

2.16

%

Robert
Blalock
(6)

132,235

12,500

144,735

*

Cathy
Cox

3,860

3,860

*

Hoyt
O. Holloway
(7)

148,714

5,000

153,714

*

John
D. Stephens
(8)

344,682

344,682

*

Tim
Wallis

240,974

10,000

250,974

*

Guy
W. Freeman
(9)

156,544

161,799

25,717

2,405

346,465

*

Rex
S. Schuette

78,402

187,553

23,036

20,098

309,089

*

David
P. Shearrow

1,039

41,562

22,127

19,867

84,595

*

Glenn
S. White
(10)

246,568

41,561

22,103

5,000

315,232

*

All
directors and executive

officers
as a group

(16
persons)

6,023,677

969,290

127,489

73,141

166,250

7,359,847

7.58

%

*
Represents less than 1% of the deemed outstanding shares of common
stock.

___________________

(1)

Based
on information contained in Schedule 13G filed by BlackRock, Inc.
(“BlackRock”) with the Securities and Exchange Commission on
January 29, 2010, which indicates that BlackRock has sole voting
power and sole dispositive power relative to 5,933,174 shares of company
stock. The address of BlackRock is 40 East 52nd Street, New
York, NY 10022. As previously announced, on December
1, 2009, BlackRock completed its acquisition of Barclays Global Investors
from Barclays Bank PLC. As a result, [substantially all of] the
BGI Entities are now included as subsidiaries of BlackRock for purposes of
Schedule 13G filings.

Includes
385 shares owned by Mr. Tallent's wife for which he claims beneficial
ownership; and 308 shares owned by Mr. Tallent's minor grandchildren for
which he is custodian.

(4)

Includes
1,276,179 shares pledged; 288,915 shares beneficially owned by a trust
over which Mr. Head has voting power; 5,697 shares owned by Mr. Head's
wife; and 36,699 shares owned by Mr. Head's grandchildren for which he is
custodian.

(5)

Includes
620,507 shares pledged; 49,594 shares owned by Mr. Nelson's minor
grandchildren for which he is custodian; 1,400 shares owned by Conag
Rentals, Inc., a company owned by Mr. Nelson; 1,218 shares owned by King
Ford, a company in which Mr. Nelson is 50% owner, and 51,866 shares owned
by Mr. Nelson’s wife.

(6)

Includes
37,549 shares pledged; 120 shares owned by Mr. Blalock's child for which
he is custodian; 96,608 shares owned by Blalock Insurance Agency, Inc., a
company owned by Mr. Blalock; and 7,960 shares owned by Mr. Blalock’s
wife.

(7)

Includes
58,678 shares owned by Holloway Motors, Inc., a company wholly owned by
Mr. Holloway; 5,726 shares owned by Mr. Holloway's wife; and fully
exercisable Warrants to purchase 5,000 shares in the name of Holloway
Revocable Trust, a trust over which Mr. Holloway is
Trustee.

(8)

Includes
11,710 shares owned by John D. Stephens & Sons LP, a company owned by
Mr. Stephens.

(9)

Includes
2,498 shares owned by Mr. Freeman's wife.

(10)

Includes
13,574 shares owned by a trust for which Mr. White claims beneficial
ownership; and 35,965 shares owned by Mr. White's
wife.

SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section
16(a) of the Securities Exchange Act of 1934 requires United’s directors and
senior executives, and persons who own more than 10% of United’s common stock,
to file with the Securities and Exchange Commission certain reports of
beneficial ownership of the common stock. Based solely on copies of
such reports furnished to United and representations that no other reports were
required, United believes that all applicable Section 16(a) reports were filed
by its directors, officers and 10% shareholders during the fiscal year ended
December 31, 2009 except that Director Head did not file a timely report for
seven transactions in 2009 and 2008 and Director Wallis did not file a timely
report for one transaction in 2009.

AUDIT
COMMITTEE REPORT

The Audit
Committee operates pursuant to an Audit Committee Charter that was adopted by
the Board following its annual review and assessment of its charter on July 17,
2003. United’s management is responsible for its internal accounting
controls and the financial reporting process. United’s independent
registered public accountants, Porter Keadle Moore, LLP (“
PKM
”), are
responsible for performing an audit of United’s consolidated financial
statements in accordance with auditing standards of the Public Company
Accounting Oversight Board and for expressing an opinion as to their conformity
with U.S. generally accepted accounting principles. The Audit
Committee’s responsibility is to monitor and oversee these
processes. The Board of Directors, in its business judgment, has
determined that all three members of the Audit Committee are “independent”, as
defined by the federal securities laws and the Nasdaq Listing
Requirements.

In
keeping with that responsibility, the Audit Committee has reviewed and discussed
United’s audited consolidated financial statements with management and
PKM. In addition, the Audit Committee has discussed with PKM the
matters required to be discussed by Statement on Auditing Standards No. 61,
“Communications with Audit Committee”, as currently in effect. In
addition, the Audit Committee has received the written disclosures and letter
from PKM required by Independence Standards Board Standard No. 1, “Independence
Discussions with Audit Committees”, and has discussed with PKM their
independence. The Audit Committee has also considered whether the
provision of non-audit services by PKM is compatible with maintaining their
independence.

35

The Audit
Committee also discussed with management, United’s internal auditors and PKM the
quality and adequacy of United’s internal controls over financial reporting and
the internal audit function’s organization, responsibilities, budget and
staffing. It reviewed management’s assessment of such internal
controls and PKM’s attestation thereof. The Audit Committee reviewed
both with PKM and internal auditors their audit plans, audit scope and
identification of audit risks.

None of
the members of the Audit Committee are professionally engaged in the practice of
auditing or accounting and are not experts in the fields of accounting or
auditing, including in respect of auditor independence. Members of
the Audit Committee rely, without independent verification, on the information
provided to them and on the representations made by management and
PKM. Accordingly, the Audit Committee’s oversight does not provide an
independent basis to determine that management has maintained appropriate
accounting and financial reporting principles or appropriate internal controls
and procedures designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee’s
considerations and discussions referred to above do not assure that the audit of
United’s financial statements has been carried out in accordance with the
standards of the Public Company Accounting Oversight Board, that the financial
statements are presented in accordance with U.S. generally accepted accounting
principles or that United’s auditors are in fact “independent”.

Based on
the reports and discussions described in this report, and subject to the
limitations on the role and responsibilities of the Audit Committee referred to
above and in the Audit Committee Charter, the Audit Committee recommended to the
Board of Directors that the audited consolidated financial statements of United
be included in the Annual Report on Form 10-K for the year ended December 31,
2009 for filing with the Securities and Exchange Commission.

This
report is respectfully submitted by the Audit Committee of the Board of
Directors.

The Board
of Directors unanimously approved, subject to shareholder approval, an amendment
to the Restated Articles of Incorporation of United to increase the number of
authorized shares of common stock, $1.00 par value (the “
Common
Stock
”), from 100,000,000 to 200,000,000 shares. At
December 31, 2009, United had 94,045,603 shares of Common Stock issued and
outstanding. The public offering of Common Stock completed by United
on September 30, 2009 included the issuance of 44,505,000 shares of Common
Stock, leaving United with only 5,954,397 authorized but unissued shares of
Common Stock. Of the 5,954,397 remaining authorized shares of Common
Stock on that date, 2,503,710 shares of Common Stock were reserved for issuance
of shares for the exercise of warrants issued in connection with the issuance of
preferred stock to the U.S. Treasury, exercise of warrants issued in connection
with the issuance of trust preferred securities, exercise of options
outstanding, vesting of restricted stock and restricted stock units and issuance
of shares under our deferred compensation plan. The Board believes
that it would be in the best interests of United and its shareholders to
increase this number of authorized but unissued shares of Common
Stock.

Purpose
of Authorizing Increased Shares

The
purpose of increasing the authorized number of shares of Common Stock is to give
the Board of Directors greater flexibility in connection with United’s capital
structure, possible future financing requirements, employee compensation and
other corporate matters. The Board also believes that having
sufficient shares remaining available for use will enable the Board of Directors
to act quickly to take advantage of various business opportunities, including
FDIC assisted transactions, acquisitions and financings. United also
needs available shares for general corporate purposes, such as for stock splits
or dividends.

Effect
of Proposal

If this
proposal is approved, the Board of Directors will have the authority to issue
the additional authorized shares, publicly or privately, to persons and for
considerations as it may determine without further action by the
shareholders. Any issues of additional Common Stock could have a
dilutive effect on the book value and earnings per share of the outstanding
shares and would decrease the relative voting power of current
shareholders. United does not currently have any material
commitments, arrangements, or understanding which would require the issuance of
additional shares of Common Stock, other than as described in Proposal
4.

The Board
of Directors does not believe that an increase in the number of authorized
shares of Common Stock will have a significant impact on any attempt to gain
control of United. It is possible, however, that the availability of
authorized but unissued shares of Common Stock could discourage third parties
from attempting to gain control since the Board could authorize the issuance of
shares of Common Stock in a manner that could dilute the voting power of a
person attempting to acquire control of United, increase the cost of acquiring
such control or otherwise hinder such efforts. The Board is not aware
of any present threat or attempt to gain control of United and this Proposal 2
is not in response to any such action nor is it being presented with the intent
that it be utilized as a type of anti-takeover device.

If this
proposal is adopted, the text of the first paragraph of Article V in United’s
Restated Articles of Incorporation would be amended to read as set forth in
Appendix A. Although United intends to file the amendment with the
Secretary of State of Georgia as promptly as possible after the amendment is
approved by shareholders, the Board reserves the right to delay or abandon the
amendment at its discretion.

37

Vote
Required

The
affirmative vote of holders of a majority of the shares of Common Stock
outstanding on the record date is required to approve the
amendment. Accordingly, any abstention or broker non-vote will count
as a vote against the proposal.

Recommendation

The
Board of Directors unanimously recommends that you vote “FOR” Proposal
2.

The Board
of Directors unanimously approved, subject to shareholder approval, an amendment
to the Restated Articles of Incorporation of United to eliminate the shareholder
vote required for the Board to amend the Bylaws of United. Currently,
an amendment of the Bylaws requires the affirmative vote of the holders of
two-thirds of the shares of United’s capital stock that are issued and
outstanding and entitled to vote on such matters. The Board believes
that it would be in the best interests of United and its shareholders to
simplify the vote required for the amendments of the Bylaws.

Purpose
of Allowing Bylaw Amendments

The
purpose of simplifying the vote required for approval to amend the Bylaws is to
streamline the process of making changes to United’s corporate governance
policies and procedures, as changing circumstances may necessitate, that may
require an amendment of the Bylaws. Shareholder approval of
amendments to the Bylaws is very uncommon and not required by any law or
regulation or Nasdaq Listing Requirements applicable to United. The
articles of incorporation of many public companies expressly authorize their
boards of directors to adopt, amend, alter or repeal the bylaws and do not
reserve such power exclusively to the shareholders. Granting United’s
Board of Directors this authority will facilitate the Board of Director’s
ability to efficiently implement and adapt corporate policies and procedures, as
changing circumstances may necessitate, without having to incur the expense and
delay of soliciting proxies and votes from the shareholders and holding a
meeting of shareholders.

The
provision of the Restated Articles of Incorporation regarding the amendment of
the Bylaws was implemented as an anti-takeover measure to help prevent
unfriendly or unsolicited takeovers. At this time, United does not
maintain the same anti-takeover concerns that existed when the Restated Articles
of Incorporation were adopted, and United, therefore, desires to eliminate the
super-majority voting requirement to adopt, amend or repeal any provision of the
Bylaws. Accordingly, the proposed amendment removes the
super-majority voting requirement for amendments to the Bylaws.

Effect
of Proposal

If this
proposal is approved, the Board of Directors will have the authority to amend
the Bylaws with the affirmative vote of the holders of a majority of the
Board.

38

The Board
of Directors does not believe that eliminating shareholder approval for
amendments to the Bylaws will have a significant impact on any attempt to gain
control of United. The Board is not aware of any present threat or
attempt to gain control of United and this Proposal 3 is not in response to any
such action.

If this
proposal is adopted, the text of Article XI in United’s Restated Articles of
Incorporation would be amended to read as set forth in Appendix
A. Although United intends to file the amendment with the Secretary
of State of Georgia as promptly as possible after the amendment is approved by
shareholders, the Board reserves the right to delay or abandon the amendment at
its discretion.

Vote
Required

The
affirmative vote of holders of two-thirds of the shares of Common Stock
outstanding on the record date is required to approve the
amendment. Accordingly, any abstention or broker non-vote will count
as a vote against the proposal.

Recommendation

The
Board of Directors unanimously recommends that you vote “FOR” Proposal
3.

Since
mid-2007, and continuing through 2009 and into 2010, the financial markets and
economic conditions generally were materially and adversely affected by
significant declines in the values of nearly all asset classes and by a serious
lack of liquidity. This was initially triggered by declines in home
prices and the values of subprime mortgages, but spread to all residential
construction, and residential mortgages as property prices declined rapidly and
to nearly all asset classes. The effect of the market and economic
downturn also spread to other areas of the credit markets and in the
availability of liquidity. The magnitude of these declines led to a
crisis of confidence in the financial sector as a result of concerns about the
capital base and viability of certain financial institutions. During
this period, interbank lending and commercial paper borrowing fell sharply,
precipitating a credit freeze for both institutional and individual
borrowers. Unemployment has also increased
significantly.

Our
markets have been severely disrupted by the weak housing market which resulted
in the buildup of surplus housing and finished lot inventory, particularly
within the Atlanta, Georgia MSA and north and coastal Georgia, which has put
considerable stress on the residential construction portion of our loan
portfolio. The weak economic conditions spread beyond the housing
market, pushing unemployment to levels not seen in decades.

Our
approach to managing through the challenging economic cycle has been to
aggressively deal with our credit problems and dispose of troubled assets
quickly, taking losses as necessary. As a result, our provision for
loan losses was $310 million in 2009 compared with $184 million in
2008. Net charge-offs for 2009 were $276.7 million compared with
$151.2 million in 2008.

The
impact of the increase in nonperforming assets and related credit losses has
resulted in significant losses over the past two years and has eroded the equity
of United shareholders’ and the regulatory capital ratios of
United. We reported a net loss of $228.3 million in 2009, which
included non-cash charges of $95 million for goodwill impairment, a $2.9 million
charge for a reduction in workforce, and a gain of $11.4 million for the
acquisition of Southern Community Bank. This compared to a net loss
of $63.5 million in 2008. In response to these events, we have taken
steps to strengthen our capital structure by increasing common and preferred
equity as well as providing for contingent capital through the Fletcher
transaction discussed below.

39

Capital
resources and liquidity are essential to our businesses. We depend on
access to a variety of sources of funding to provide us with sufficient capital
resources and liquidity to meet our commitments and business needs, and to
accommodate the transaction and cash management needs of our customers,
including raising funds from time to time in the form of either short- or
long-term borrowings or equity issuances.

The
weakened United States banking industry offers numerous opportunities for
potential FDIC-assisted acquisitions of small to mid-sized failed and failing
banks. Access to capital resources will allow us to pursue such
acquisition opportunities or other growth objectives in a timely fashion, if we
should decide to do so. We currently have no arrangements or
understandings regarding any specific future acquisitions. Access to
capital resources also will allow us to support our subsidiary bank, support
asset and deposit growth and meet such business needs as attracting and
recruiting talented personnel, performing operational upgrades, as necessary,
and remaining current on new and emerging technology.

We are
asking our shareholders to support our plan to increase our capital resources
and liquidity by supporting the private capital offering to Fletcher
International, Ltd. Additionally, this capital offering was part of a
larger transaction that included the sale of $100 million of non-performing
assts at our book value to Fletcher. Both transactions are described
in greater detail below. The Board of Directors believes that our
ability to complete the Fletcher offering is very important to our ability to
realize our capital objectives.

Purpose
of Issuing Shares

On
April 1, 2010, we entered into a securities purchase agreement (the “
Securities
Purchase Agreement
”) with Fletcher pursuant to which Fletcher agreed to
purchase 65,000 shares of United’s Series C convertible preferred stock, par
value $1.00 per share (“
Convertible
Preferred Stock
”), at a purchase price of $1,000 per share, for an
aggregate purchase price of $65 million. In connection with this
capital facility, Fletcher has the option to acquire $65 million of Convertible
Preferred Stock of United by May 26, 2012, subject to limited
extensions. The Preferred Stock will initially bear interest at a
rate equal to the lesser of 12% per annum and LIBOR + 8% per annum, and, if
shareholder approval of this proposal is received, the Preferred Stock will bear
interest at a rate equal to the lesser of 8% and LIBOR + 4% per
annum. If all of the conditions to Fletcher’s obligations to purchase
Convertible Preferred Stock under the Securities Purchase Agreement are
satisfied and Fletcher has not purchased all of the Convertible Preferred Stock
by May 26, 2011, it must pay United 5% of the $65 million not yet purchased
by such date, and it must pay United an additional 5% of the $65 million that is
not purchased by May 26, 2012.

The
Securities Purchase Agreement provides that neither United nor Fletcher shall
have the right to convert or redeem any portion of the Convertible Preferred
Stock into Common Stock to the extent such conversion or redemption would result
in aggregate issuances to Fletcher of in excess of 9.75% of the number of shares
of Common Stock that would be outstanding after giving effect to such conversion
or redemption. In the event that United cannot effect a conversion or
redemption of the Convertible Preferred Stock into Common Stock due to the limit
described in the immediately preceding sentence, the conversion or redemption
shall be effected into an equal number of shares of non-voting Common Stock
Equivalent Junior Preferred Stock, par value $1.00 per share, of the Company
(“
Junior
Preferred Stock
”); provided, however, that in no event shall United
effect any conversion or redemption of the Convertible Preferred Stock or
exercise of the Warrant (defined below) to the extent such conversion,
redemption or exercise would result in aggregate issuances to Fletcher of in
excess of 33.33% of the Total Equity of United. For purposes of the
preceding sentence, “Total Equity” means the value as reflected on the balance
sheet of United of all shares of common, preferred and other equity capital of
United outstanding as of the date of determination.

40

The
Convertible Preferred Stock is convertible by Fletcher at any time into Common
Stock or Junior Preferred Stock, at $5.25 per share of Common Stock or
one-hundredth of a share of Junior Preferred Stock. United will have
the option to convert all of the Convertible Preferred Stock then outstanding
into Common Stock or Junior Preferred Stock, at a conversion price of $6.02 per
share of Common Stock or one-hundredth of a share of Junior Preferred Stock, at
any time after May 26, 2015, in which the twenty-five day average closing
stock price of our Common Stock is at or above $12.04 per share.

As
mentioned earlier, United has also entered into an asset purchase and sale
agreement (the “
Asset Purchase
Agreement
”) with Fletcher’s affiliate Fletcher International, Inc. and
certain other affiliates (collectively, the “
Purchasers
”). Pursuant
to the Asset Purchase Agreement, the Purchasers have agreed to purchase certain
non-performing commercial and residential mortgage loans and other real estate
owned properties with an aggregate carrying value equal to Bank’s carrying value
of $100 million. This purchase of non-performing assets is expected
to close on April 30, 2010. Pursuant to the terms of the Asset
Purchase Agreement, the Purchasers will pay 20% of the purchase price in cash
($10 million of which has already been paid as a deposit) and United will loan
the remaining 80% of the purchase price to acquire the non-performing
assets. The Purchasers are also required to provide 17.5% of the
carrying value of the assets, up front, to pre-fund the estimated three years’
of carry costs related to the purchase of the non-performing
assets.

Concurrently
with the payment of the deposit under the Asset Purchase Agreement by the
Purchasers, Fletcher was granted a warrant to purchase Junior Preferred
Stock. The warrant amount is initially equal to $15
million. The warrant amount will be increased by $0.15 for each $1.00
of assets purchased by Fletcher pursuant to the Asset Purchase Agreement, for a
total increase of up to $15 million, with the increased warrant amount becoming
effective once the asset purchase is closed. The warrant amount will
be further increased on a dollar for dollar basis by the aggregate dollar amount
of Convertible Preferred Stock purchased under the Securities Purchase Agreement
in excess of $30 million. The warrant price for the first $30 million
of the warrant shall be $4.25 for each one-hundredth of a share of Junior
Preferred Stock. The warrant price for the amount in excess of $30
million shall be $6.02 for each one-hundredth of a share of Junior Preferred
Stock. The warrant may only be exercised in a cashless exercise and
is exercisable for nine years.

Benefits
to United

We
believe this transaction is very unique and attractive for United and its
shareholders. It allows us to sell $100 million of our more illiquid
non-performing assets in our non-Atlanta markets while avoiding any additional
charge-offs and credit costs. This is particularly attractive due to the lack of
investors in these markets and the difficulty we have experienced in
successfully selling lots, raw land, and other properties. This
transaction helps to significantly reduce our non-performing assets by about
25%, allowing us to achieve our goal of reducing non-performing assets at the
highest economic value to our shareholders while preserving our capital
position.

As part
of that transaction, the capital facility with Fletcher provides United with
access to additional capital at a cost that we believe is very attractive and
allows us to be more proactive in pursuing market opportunities. The
Board of Directors believes that United currently maintains a sound capital
position and this facility will further enhance our capital
base.

41

Use
of Proceeds

We intend
to use the net proceeds from this offering to provide capital to support our
subsidiary bank and for general corporate purposes which may include, without
limitation, making investments at the holding company level, supporting asset
and deposit growth, and engaging in acquisitions or other business combinations
(which may include FDIC-assisted transactions). We do not have any
specific plans for acquisitions or other business combinations at this
time. Our management will retain broad discretion in the allocation
of net proceeds from this offering.

Reasons
for Requesting Shareholder Approval

We have
been working with Fletcher on this transaction for some time. Our
objective was to create a structure that provides an opportunity for new
capital combined with the sale of non-performing assets at book value that is
both innovative and strategic. We appreciate the commitment by
Fletcher and we welcome them as shareholders of United.

Under
Nasdaq Listing Requirements, we are required to obtain approval from our
shareholders in order to sell or issue shares of our common stock in a
non-public offering in an amount equal to 20% or more of the outstanding shares
of our common stock for less than the greater of book or market value of such
shares of common stock. In the Fletcher transaction, although the
average purchase price for our common stock that may be issued to Fletcher is
$5.15 per share, which is a premium to our market value per share of $4.41 as of
March 31, 2010, it is less than our tangible book value per share of $6.02
as of December 31, 2009. As a result, the Board of Directors is
seeking shareholder approval to permit the issuance of securities to Fletcher as
described above.

If this
proposal is not approved by shareholders, the Securities Purchase Agreement
provides that we shall not effect any conversion or redemption of the Preferred
Stock or any exercise of the Warrant, and Fletcher shall not have the right to
convert or redeem the Preferred Stock or exercise any portion of the Warrant, to
the extent such action would result in issuances to Fletcher of Common Stock and
Junior Preferred Stock (measured on an as converted basis) in excess of 19.99%
of the shares of our common stock outstanding as of the date of the Securities
Purchase Agreement. In addition, as described above, if shareholder
approval is received, the interest rate on the Preferred Stock will be
decreased.

Vote
Required

The
affirmative vote of a majority of the votes cast by the holders of the shares
entitled to vote at a meeting at which a quorum is present is required to
approve the proposal. Accordingly, any abstention or broker non-vote
will not count as a vote against the proposal.

Recommendation

The
Board of Directors unanimously recommends that you vote “FOR” Proposal
4.

42

PROPOSAL
5 – APPROVAL OF ADVISORY RESOLUTION

SUPPORTING
THE COMPENSATION PLAN FOR EXECUTIVE OFFICERS

General

The ARRA
requires United to permit a non-binding advisory vote on the compensation of its
Named Executive Officers, as described and presented in
the “Executive Compensation” section, including “Compensation
Discussion and Analysis” and the accompanying narrative disclosure, during the
period in which any obligation arising from United’s participation in the CPP
remains outstanding.

This
proposal, commonly known as a “say-on-pay” proposal, gives United’s shareholders
the opportunity to endorse or not endorse our executive compensation program and
policies through an advisory vote on the following resolution:

“Resolved,
that the shareholders approve the compensation of the Named Executive Officers,
as described in the “Executive Compensation” section of the 2010 Proxy
Statement, including the “Compensation Discussion and Analysis” and the
accompanying narrative and tabular disclosures.

Because
your vote is advisory, it will not be binding upon the Board of
Directors. However, the Compensation Committee will take into account
the outcome of the vote when considering future executive
compensation.

Recommendation

The
Board of Directors unanimously recommends a vote “FOR” this
proposal.

PROPOSAL
6 - RATIFICATION OF APPOINTMENT OF INDEPENDENT

REGISTERED
PUBLIC ACCOUNTANT

General

The Audit
Committee of the Board of Directors has appointed PKM to serve as United’s
independent registered public accountant during the year ended December 31,
2010. The Board of Directors will present to the Annual Meeting a
proposal that such appointment be ratified.

Vote
Required

Each
proxy executed and returned by a shareholder will be voted as specified thereon
by the shareholder. If no specification is made, the proxy will be
voted for the proposal to ratify the appointment of PKM to act as the United’s
independent registered public accountant for 2010. Pursuant to the
Georgia Business Corporation Code, the proposal to ratify the appointment of PKM
is approved if a majority of the votes cast by the holders of the shares
entitled to vote at a meeting at which a quorum is present are voted for the
proposal.

Neither
United’s Articles of Incorporation nor Bylaws require that the shareholders
ratify the appointment of PKM as its independent auditors. United is
doing so because it believes it is a matter of good corporate
practice. Should the shareholders not ratify the selection, the Audit
Committee of the Board of Directors will reconsider its determination to retain
PKM, but may elect to continue the engagement. Even if the selection
is ratified, the Audit Committee in its discretion may change the appointment at
any time during the year if it determines that the change would be in the best
interests of United and its shareholders.

43

Recommendation

The
Board of Directors unanimously recommends a vote “FOR” the ratification of
PKM.

OTHER
MATTERS

Independent
Registered Public Accountants

PKM was
the principal independent registered public accountant for United during the
year ended December 31, 2009. Representatives of PKM are expected to
be present at the Annual Meeting and will have the opportunity to make a
statement if they desire to do so and to respond to appropriate
questions. United anticipates that PKM will be United’s accountants
for the 2010 fiscal year.

During
2009 and 2008, United was billed the following amounts for services rendered by
PKM:

Audit Fees.
In
connection with the audit of United’s annual consolidated financial statements,
including the audit of management’s assessment of internal controls over
financial reporting, and review of its Form 10-K and the review of United’s
interim consolidated financial statements included within Forms 10-Q, United was
billed approximately $583,000 in 2009 and $560,000 in 2008 by
PKM. These figures include agreed upon fees for certain services that
were unbilled at each respective year end in connection with the 2009 and 2008
annual audits. In addition, United paid fees of $69,000 and $4,000,
respectively, in 2009 and 2008 for services related to various registration
statements.

Audit-Related
fees.
United was billed approximately $23,000 in 2009 and
$23,000 in 2008 by PKM for the audit of the 401(k) Plan.

Tax Fees.
There were no tax
services provided in 2009 or 2008.

All Other Fees.
There were no
other services performed by PKM that were not related to the audit of United’s
financial statements during 2009 and 2008.

The Audit
Committee pre-approves all audit and non-audit services performed by
PKM. The Audit Committee specifically approves the annual audit
services engagement and has generally approved the provision of certain
audit-related services and tax services by PKM. Certain non-audit
services that are permitted under the federal securities laws may be approved
from time to time by the Audit Committee.

Expenses
of Solicitation

The cost
of solicitation of proxies will be borne by United. United may
reimburse brokers, banks, nominees and other fiduciaries for postage and
reasonable clerical expenses of forwarding the proxy material to their
principals who are beneficial owners of shares of common stock.

Shareholder
Proposals & Recommendations for Director Nominees

No
proposals or recommendations for director nominations by non-management have
been presented for consideration at the Annual Meeting.

44

United
expects that its 2011 Annual Meeting will be held in April 2011. Any
proposals or director recommendations by non-management shareholders intended
for presentation at the 2011 Annual Meeting must be received by United at its
principal executive offices, attention of the Secretary, no later than December
13, 2010 to be considered for inclusion in the proxy statement for that
meeting. United must be notified no later than March 14, 2011 of any
other shareholder matter intended to be presented for action at the
meeting.

Information
Incorporated by Reference

The
financial statements contained in United's annual report on Form 10-K are
incorporated by reference into this proxy statement.

General

The Board
of Directors does not know of any other matters to be presented at the Annual
Meeting. If any additional matters are properly presented, the
persons named in the proxy will have discretion to vote in accordance with their
own judgment on such matters.

The corporation shall have authority to
issue
1
2
00,000,000
shares of common stock, $1.00 par value (the “Common Stock”) and 10,000,000
shares of preferred stock, $1.00 par value (the “Preferred
Stock”). Subject to the provisions of any applicable law or the
Bylaws of the corporation (as from time to time amended) with respect to fixing
the record date for the determination of shareholders entitled to vote, and
except as otherwise provided by any applicable law or the by the resolution or
resolutions of the board of directors providing for the issue of any series of
Preferred Stock, the holders of the Common Stock shall have and possess
exclusive voting power and rights for the election of directors and for all
other purposes, with each share being entitled to one vote.

Except as
otherwise provided by law, any amendment or repeal of any provision of the
Articles of Incorporation
or the Bylaws
of
the corporation requires the affirmative vote of holders of two-thirds of the
shares of capital stock of the corporation then issued and outstanding and
entitled to vote on such matters. Notwithstanding anything herein to
the contrary, the number of authorized shares of any class of capital stock of
the corporation may be increased by the affirmative vote of holders of a simple
majority of the shares of capital stock of the corporation then issued and
outstanding and entitled to vote on such matters.